Winding Up — Co-ops. A double-edged sword?

Defendants in Selecta, the Swiss vending machine operator, asked a US court last week to quash an antitrust allegation tied to their cooperation agreement. As litigation over co-ops comes to a head across the pond, 9fin gathered a panel of experts in London this week to examine the tool’s past and consider its potential future in Europe.

On a blustery Wednesday evening, market experts told audiences at the ‘European Co-ops — A double-edged sword’ event that the continent’s experience with co-ops will likely be less contentious than in the US. “Because Europe has quicker and cheaper tools than the US which sponsors can deploy close to maturity, the risk of the more aggressive US-style LME isn't as prevalent here, nor is the need to jump into a co-op with all its consequences,” said Lisa Stevens, restructuring partner at Gibson Dunn.

Although less belligerent than in the US, co-ops in the continent certainly have become part of lenders’ restructuring repertoire. “As you're sat around the table of one of Europe's largest private equity sponsors, you have a lot of lending to them and they have a lot of interactions with you. If you're able to say that you speak for 80%-85% of the creditor base, it stops them going around and picking people off,” explained Mitchell Glynn, managing director at CVC.

As part of a co-op, Glynn said, “we are negotiating here on behalf of all creditors for a pro-rata deal. I'm not going to do something for myself that isn't beneficial to others. And it gave us that gravitas and that weight that we really had to be listened to.”

But whatever a co-op agreement aims to achieve, any manoeuvring is limited by what the courts are prepared to permit, according to another panellist. “I don't think co-ops can be effective in continental Europe/UK like they are in the US, for a lot of reasons. First of all, most of the results will end up in court, and you are going to be bound by what’s possible to do in a French SFA or UK 26A for example,” said Laurent David, partner at Anchorage. “Even for out-of-court restructurings the co-op will be subject to local law guardrails and therefore the co-op is not necessarily going to dictate the outcome.”

“So, you can write anything in the co-op agreement. But there will be limits in a lot of the deals, the limits equal to what you can get through, the French court, the German court, whatever,” David added.

The panel, moderated by 9fin senior reporter Bianca Boorer, also considered the most appropriate time is to enter into a co-op. The sooner the better? Or would it make more sense to wait for the most opportune moment? “People like pre-emptive strikes,” quipped Saam Golshani, restructuring partner at White and Case, adding that he would counsel lenders to enter into a co-op only once they know what they want to do as a group and not earlier than that.

“You have to know there's an arbitrage between your optionality and your freedom as a creditor and whatever protection you get by being in a pack of creditors bound by the co-op. So there's a trade-off between that optionality and the protection of the pack,” Golshani emphasised. “You have to assess that price of being in co-ops before you sign. So I would say in 90% of cases it's better to wait a bit before signing. Maybe in 10% of cases, it's good to do a little bit of a pre-emptive strike and then see what's going to happen.”

Gibson’s Stevens, said being part of a co-op ahead of time could yield “peace of mind and a safety net until maturity”. To dither for a propitious moment may prove too costly. “You can't put the genie back in the box and what I mean by that is once a sponsor or company has been in an aggressive move in a US-style LME context, you're on the back foot and so it's harder to put co-op in place there,” Stevens explained.

In their rapid rise, have co-ops turned into an offensive tool in lenders’ repertoire from a defensive mechanism to protect against sponsors’ non pro-rata tactics? The panellists noticed that Europe still operates “like a village” with market actors’ familiarity with each other proving a foil against audacious moves reminiscent of the US. “I'm being very much aware of and switched on to the idea that this lovely defensive tool can be turned into an offensive tool. Most of it's coming from North America and Europe are still using it as a defensive mechanism,” said Glynn of CVC.

“Now a new phase that I'm seeing is the concept of 'well why don't we get together as a 50.1% group? We'll let the trading desk know that there's a co-op now and we'll just leave and let market panic set in,’” he added.

The recent litigation on Selecta and Optimum has not led to a dampening of co-ops in Europe, according to Stevens. “We’ve actually seen it as business as usual,” she said.

Finally, what of the future of co-ops as a phenomenon? “I think there is a trendiness attached to co-ops and as always with trendiness, it fades away,” remarked Golshani of White and Case.

“As we go through the next cycle of restructuring it's going to be just a tool in the toolbox that people will use in the right time in the right situation,” he added.

Want to know even more? Sign up to 9fin’s crash course on co-ops here.

Now on to…

This week’s news

Alanta Health Group — The German healthcare provider owned by private equity firm IK Partners, has appointed Latham & Watkins as legal advisor, as it faces challenges securing a refinancing, according to 9fin sources. The move follows a deterioration in financing conditions and mounting legal challenges, as well as a failed attempt to place a Nordic bond, as 9fin previously reported.

Arrow Global — The debt collection company is nearing the end of its transition from capital-intensive debt purchaser to capital-lite asset manager, with management confirming on its FY 25 earnings call that it is closing in on its medium-term goals. Its fund management business continues to grow with €2.7bn deployed in 2025, compared to €2.1bn in 2024. Management expects to be consistently around the €3bn annual deployment level going forward despite emphasising a cautious approach given the current macro environment.

CABB — The German agrochemical company reported Q4 25 revenue of €121.2m, down 11.9% YoY, and adjusted EBITDA of €30.9m, broadly flat on Q4 24, with margins expanding 240bps to 25.5%. Its results were accompanied by two meaningful structural actions — the completed sale of Jayhawk Fine Chemicals and the announced closure of the Knapsack MCA site. Read our analysis here.

Deutsche Glasfaser — The German broadband provider’s sponsors EQT and OMERS have put forward a revised proposal to creditors in an effort to break a deadlock over the German fibre operator’s recapitalisation, according to 9fin sources. The updated plan — which is now under review — keeps the broad contours of earlier discussions but introduces adjustments aimed at making the package more acceptable to lenders.

Dolce & Gabbana — The Italian luxury fashion house has hired Rothschild to run debt negotiations with its lenders as a worsening outlook for the luxury sector puts increasing strain on the Italian fashion house’s finances. The company is seeking to renegotiate terms on its debt, including financial covenants, in order to better align its capital structure with current trading conditions.

Emeria (Foncia) — The French property management company’s FY 25 earnings print points to a business that is gradually stabilising operationally, with the recovery in flow activities now feeding through more visibly, while the core stock perimeter remains broadly resilient. French B2C sales continued to rebound, B2B kept growing, and the UK again provided a solid contribution, while Switzerland remains the key drag on profitability.

First Brands — The auto parts company has requested that the bankruptcy court approve an emergency process to liquidate its remaining assets and to retain Hilco to run the wind-down. The debtors state that liquidity constraints and failed sale processes have left no viable path other than an expedited wind-down of several of its North American business units.

ION Platform — ION Group’s push to bring together its Italian assets — Cerved, Cedacri, and Prelios — is shaping up as the next test of its long-running strategy of building integrated financial platforms through acquisition. But for credit investors, the key question is less about industrial logic and more about how such a consolidation would be structured — and who ultimately bears the risk. Read more here.

Kantar — The computer services company reported FY 25 revenue of $2.8bn on 25 March, up 0.3% YoY, while adjusted EBITDA rose 3.9% YoY to $634m, lifting the margin by 80bps to 22.6%, driven by cost cuts. Management devoted a significant portion of the call to AI, positioning it as a structural tailwind for costs and — increasingly — for revenue. Read our analysis here.

Lecta — The European Commission has cleared Apollo’s majority position in the Spanish papermaker, as a part of the process to ensure the company’s recapitalisation by the end of April. Under the transaction, key stakeholders — also including Cheyne and Tikehau — will all get larger shareholdings in Lecta, with Apollo’s stake rising above 50%, they added.

Market Financial Solutions — Property companies related to former Bangladeshi land minister Saifuzzaman Chowdhury, which are now all in administration, have filed a court case naming the former Market Financial Solutions institutional funding vehicles as third parties. Administrators Oliver Haunch, Robert Starkins and Kevin Hellard of Grant Thornton, who are working on the administrations of the four Chowdhury-linked propcos filed a “miscellaneous application under the insolvency act” on Monday. Meanwhile, lawyers asked an insolvency court judge to approve a plan that would allow the sale of hundreds of properties tied to the corruption investigation into former Bangladeshi land minister Saifuzzaman Chowdhury and the collapse of bridging lender.

Merlin Entertainments — 2025 was expected to be a transitional year for the theme park operator. While management did not provide detailed guidance on its FY 25 earnings call this week (Transcript & Playback here), they see the foundations laid in 2025 to support growth in 2026 and beyond. Read our analysis here.

Mobico — Law firms have been pitching lenders on potential advisory roles around the coach operator, according to 9fin sources, as the company reshuffles its leadership and continues to explore ways to deleverage ahead of upcoming maturities. The lender outreach has not resulted in any confirmed mandate, but it reflects a growing focus on how Mobico could approach a balance sheet restructuring.

Pfleiderer — The Spanish wood manufacturer secured a €135m liquidity injection through the carve-out of its resin division, Silekol, in December last year. In February, some noteholders raised concerns about a potential non-pro rata outcome. On 10 March, Pfleiderer published an investor statement providing guidance on the outlook for the two now separate entities, EWP and Silekol. In our latest analysis, we take a deeper dive into the numbers and confirm most of the assumptions from our previous analysis.

Reno De Medici — Holders of the revolving credit facility at the Italian packaging producer have appointed Lazard as financial advisor as negotiations progress, according to 9fin sources. Alongside Lazard, three other advisory firms — DC Advisory, Houlihan Lokey, and Rothschild — were shortlisted and pitched this week, as 9fin reported.

Selecta — Motions to dismiss in the ongoing antitrust suit against the Swiss vending machine operator were filed by the defendants on 13 March, including majority lenders Invesco, Man Group, Strategic Value Partners, and Diameter Capital Partners, represented by Milbank and HSF Kramer. Read our analysis here of the majority lenders’ defense to plaintiffs’ anti-trust claims.

Stark Group — The Danish building material retailer reported a sharp down in quarterly EBITDA and leverage hike in its Q2 26 results last week, according to 9fin sources, as the company hunts for €500m in cash from property sales and financing to offset its sliding profitability. Following the results, Stark’s €1.345bn 3.5% TLB — which had already slumped last week ahead of the release — dropped a further 4 points and is currently trading in the mid-70s.

Synthomer — The British chemicals business’s revolving credit facility lenders have appointed FTI as financial advisor, as the UK-based chemicals group ramps up negotiations over its 2027 debt maturities, according to 9fin sources. The transaction is shaping up as an A&E that could incorporate some priming, the sources said. Under such a structure, bank lenders could agree to extend maturities while seeking enhanced protections in the form of collateral, effectively moving ahead of existing bondholders in the capital structure, the sources added.

Tullow Oil — The UK-based oil extractor has launched a consent solicitation to implement its proposed refinancing after securing support from 99.48% of holders of its $1.29bn 10.25% senior secured notes due May 2026, according to a company statement. The solicitation seeks formal approval from creditors for amendments to the bond indenture and intercreditor agreement

Unsere Grüne Glasfaser — Lenders to the German fibre company have appointed Linklaters as legal advisor, as financial pressure builds on the German fibre provider, according to 9fin sources. The company is working with Clifford Chance as legal counsel and DC Advisory as debt advisor, as 9fin previously reported.