(Bloomberg) — Invesco Ltd. and Searchlight Capital Partners LP are lobbying creditors of Mediapro to back a restructuring deal enabling them to take a stake in the producer of top-flight Spanish soccer broadcasts left reeling by the pandemic.
The investment firms sent a restructuring proposal to lenders to Mediapro including Cairn Capital Ltd. and Carlyle Group, on Tuesday, according to people familiar with the matter. The duo, which holds almost all of Mediapro’s second-lien and a big chunk of the first-lien debt, wants to convert it into an equity investment in the Barcelona-based firm.
Mediapro, the producer of broadcasts of league matches involving storied clubs such as Real Madrid and FC Barcelona, began talks with creditors in March to help repair its balance sheet. The firm, co-owned by Chinese private equity Orient Hontai Capital, advertising giant WPP and two of its founders, has also sought government aid in the form of pandemic-relief loans.
Invesco and Searchlight need the support of a majority of creditors for a plan that would lop 330 million euros ($402 million) from Mediapro’s debt pile of more than 900 million euros, said the people familiar with the information, who asked not to be identified by name because the information is private.
Their proposal would see the conversion into equity of all 180 million euros of the firm’s second lien debt, as well as about 150 million euros of the first lien loans, the people said.
Meanwhile, Invesco and Searchlight would provide about 150 million euros of fresh funds. The two firms have recently increased their holdings of Mediapro’s loans — mostly in the second lien — to strengthen their negotiating position, while creditors including Barings LLC and BlackRock Inc. have cut their exposure, the people familiar said.
Spokespeople for Invesco, Searchlight, Barings, BlackRock and Carlyle declined to comment. Cairn Capital didn’t respond to a request for comment.
Mediapro has not received any proposal from its lenders yet, said Tatxo Benet, a managing partner and co-founder of the company in an interview.
Spanish online newspaper El Confidencial reported yesterday without providing details that Invesco and Searchlight were buying up Mediapro debt to position themselves to take over the firm.
Mediapro makes films and TV shows for third parties, such as Amazon.com Inc., and also provides production and broadcasting services. While it doesn’t broadcast Spanish soccer itself, it does produce broadcasts of matches which are then shown by rights owner Telefonica SA.
Mediapro posted negative Ebitda for 2020 of 215 million euros after turnover plunged by more than a third as the pandemic disrupted the production of sports and business events, as well as films and series.
The company got 50 million euros from shareholders and 60 million euros in loans, of which 56 million euros was guaranteed by the government, Bloomberg reported last July.
It has also requested 230 million euros from SEPI, a Spanish government holding in charge of a 10 billion-euro rescue fund for businesses impacted by the pandemic. Half of that amount was for a loan with the rest for an equity loan, because the capital structure could not take any more debt, Benet said.
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