Lenders to Biffa are preparing a debt-for-equity restructuring if the troubled waste company is unable to reduce its £1bn debt, according to reports.
Biffa’s private equity owners, Montagu Private Equity and Global Infrastructure Partners, said in March they were working with Goldman Sacchs to look for possible buyers of the company.
Banking sources have told Reuters that senior lenders to Biffa had formed a steering committee to appoint restructuring advisers.
The group is reported to include Dexia, GE Capital, GSO Capital Partners, M&G and HSBC.
Reuters said lenders of Biffa’s mezzanine loans (unsecured loans between between senior loans and equity) were considering swapping their claims for equity in the firm as their holdings were now almost worthless.
Senior lenders, according to the report, may also begin working on a plan for a debt-for-equity swap which could wipe out Montague and GIP’s investments.
Biffa’s owners declined to comment on Reuters’ report.