LONDON Feb 9 Blackstone tabled a debt
restructuring plan for German outdoor brand Jack Wolfskin before
a lender call on Wednesday, sources close to the situation said,
as the company's earnings remain under pressure.
A coordinating committee proposed an alternative lender-led
restructuring plan on the call, which could see lenders take
control of the business from Blackstone in a debt-for-equity
swap, one source said. Blackstone declined to comment.
The coordinating committee of lenders includes HIG Capital,
CQS and Sankaty. Many of the banks that originally lent to Jack
Wolfskin sold their debt to a variety of funds which could make
it easier to get a consensual agreement to a lender-led
restructuring, sources said.
“Given the lender group composition – just funds – you could
presume that everyone shares a certain objective (to gain
control of the company),” a second source said.
The lender-led proposal includes a significant fresh cash
injection into Jack Wolfskin and would also cut lenders' debt to
€100-150m from around €300m in return for ownership of the
company, he added.
A sale process also started this week with final bids due by
the end of February. Sales are often used in debt restructuring
situations as a way to establish a valuation for the company and
a serious bidder is not expected to materialise.
“No-one expects a viable buyer to come forward at this late
stage,” the second source said.
In January Jack Wolfskin agreed a circa six-month waiver
with its lenders to give it time to agree a restructuring deal.
PJT Partners is advising the company on the restructuring, while
lenders have hired Houlihan Lokey and law firm Kirkland & Ellis.
Jack Wolfskin has been struggling with tough conditions in
the retail sector and has also faced difficulties in China since
it took direct control of the distribution of its products to
around 700 Jack Wolfskin stores in the country in 2015.
In July 2015 it amended and extended its debt, which
included a €75m capital injection from Blackstone. Blackstone
agreed to buy Jack Wolfskin in 2011 from Quadriga Capital and
Barclays Private Equity, backed with €485m of debt.
(Editing by Tessa Walsh)