EQT-backed healthcare diagnostics group Cerba Healthcare has asked a French commercial court to open supervised restructuring proceedings as it seeks to address a debt burden of around €5bn and strengthen its liquidity position, according to Private Equity Wire.
Cerba has initiated conciliation proceedings at the Tribunal des Activités Économiques de Nanterre, describing the process as a framework for negotiations with creditors over its capital structure, according to Private Equity Wire.
Court-supervised conciliation at Nanterre
The move comes as the private laboratory operator continues discussions with lenders over how to restructure its balance sheet, according to Private Equity Wire. Those talks began earlier this year after its debt load came under increasing pressure.
Cerba and EQT reportedly declined to comment on the proceedings, while PSP Investments, a minority shareholder, did not immediately respond to requests for comment.
Lender talks, liquidity measures, and sponsor support
Cerba has already taken steps to buy additional time with its lenders. Last month, Cerba agreed to extend a grace period covering interest payments on its borrowings through November, giving creditors and the company more time to negotiate a longer-term solution.
Its private equity backers also provided a €100m loan earlier this year to bolster liquidity.
Reimbursement tariff negotiations and cash generation
A key element of the restructuring discussions is the company’s ability to improve cash generation. Cerba has begun negotiations with France’s National Health Authorities over reimbursement tariffs for medical testing, with the company expecting initial outcomes by the end of September.
Private laboratories receive government-supported tariffs for diagnostic tests, and a French supervisory body recommended last year that reimbursement levels be reduced. Cerba had previously expected greater clarity on the pricing environment during the second quarter, but discussions have taken longer than anticipated.
Financial metrics cited in the report
Despite the financial pressure, Cerba reported improved operating performance for the second quarter. EBITDA increased by approximately 12% year-on-year to more than €122m, while revenue rose around 2% to €469m.
The improvement in earnings has yet to materially alter the company’s leverage profile. Cerba reported net debt of more than €4.9bn at the end of June, equivalent to approximately nine times the EBITDA generated over the preceding 12 months.
Liquidity also remains constrained. The company had around €108m of cash available at the end of June.
