Affected by the health crisis and crushed by debt, Pierre & Vacances-Center Parcs urgently needs new investors to strengthen its financial base. Rothschild & Co, which advises the group of tourist residences founded by Gérard Brémond, had asked the suitors to submit their firm proposals on Monday, November 8: three offers were expected, but, disappointment, only two should relate to the entire group.
One comes from a consortium of French real estate investor Atream, associated with London funds Alcentra and Fidera, the other is presented by the American private equity fund Sixth Street. The latest candidate, the team between the American fund Certares (already a shareholder in Voyageurs du monde and Marietton) and the New Yorker Davidson Kempner seemed to be holding the rope until then. But, according to our information, the tandem would have given up in extremis to submit a global offer, reducing its interest in Center Parcs. Which would be a blow to the organizers of this “Backing process”.
After months of running out of fuel, due to confinement and health restrictions, activity has barely restarted for Pierre & Vacances. The group welcomed, on October 19, to have cleared, between July and September, “A growth in turnover of tourism activities of 17.3% compared to the same quarter of the previous fiscal year, and of 2.2% compared to summer 2019”. Reservations are also up compared to the two previous years. But this upturn in activity is not enough, on its own, to restore the tourism operator and real estate developer, which has been accumulating losses for ten years: its debt increased during the crisis, reaching 1.1 billion euros. ‘euros.
The State is closely monitoring the case
Financial restructuring therefore appears essential in order to reduce the burden of this debt. In two ways. First, by repaying the emergency debt issued in the first half of the year thanks to the capital provided by investors, ie around 300 million euros. Then by converting part of the credits into shares. At what level ? This is what each of the contenders will have to detail in their offer. Note that Alcentra and Fidera are debt holders of Pierre & Vacances while Atream has invested nearly 600 million euros in residences of the tourism group.
The industrial project and the ability to develop the French group will also be important criteria for Franck Gervais, CEO of Pierre & Vacances. However, investors will first and foremost have to convince Gérard Brémond, the chairman of the group. The octogenarian holds 49.4% of the capital of Pierre & Vacances and more than half of the voting rights through a holding company, itself in debt. According to several sources, the buyers are encouraged to invest directly in the holding company of Mr. Brémond, in order to bail out the businessman.
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