Monier lenders reject PAI equity cure proposal

The lenders to Monier – a troubled roofing manufacturer backed by PAI Partners – have rejected a PAI-led restructuring plan and are formulating their own proposal.

Lenders to Monier, the roofing company bought out by European private equity firm PAI Partners, have rejected a restructuring plan which would have seen the buyout house inject a further €125 million, according to a source close to the situation.

The proposal from PAI, which was turned down by two-thirds of the first lien lenders, would have seen the buyout group retain 73 percent of the equity. The lenders, meanwhile, would have written off two-thirds of the debt in exchange for a minority equity stake.

A working group of lenders, fronted by Apollo Global Management, TowerBrook Capital Partners and York Capital Management, is currently working together with the steering committee – comprising five other significant lenders – on a new proposal. Details of the lender-led restructuring have yet to be finalised, but it is believed to propose a larger equity injection than PAI’s and a more significant debt ‘haircut’.

The steering committee and the working group hold around two-thirds of Monier’s debt between them.

PAI Partners acquired Monier – which manufactures roofing materials – for €1.6 billion in 2007. The business has been hit hard by the decline in residential construction and in April this year Jürgen Koch, Monier’s chief financial officer, said that high liquidity was a top priority for the business in 2009 in order secure the operating business for the “foreseeable future”.

PAI is being advised by Goldman Sachs, while the lenders’ steering committee – consisting of BNP Paribas, GE Commercial Finance, Harbourmaster, RBS and Societe Generale – is being advised by Houlihan Lokey.

All parties either declined to comment or were unavailableat press time.