Selecta First Liens Form Separate Ad Hoc Group Under Weil; Crossholder Group Retains Houlihan Lokey as Financial Advisor

A separate ad hoc group of creditors of Selecta holding a substantial portion of the Swiss vending machine operator’s first lien notes has engaged Weil Gotshal & Manges in connection with upcoming debt talks, sources told Octus, formerly Reorg.

Holders of the senior secured 8% first lien notes due April are encouraged to contact Weil by email at [email protected].

The initial crossholder group of the first, second lien notes and preferred shareholders working with Milbank has retained Houlihan Lokey as financial advisor following pitches late last week, the sources added.

Selecta is working with PJT Partners and Paul Hastings to advise on about €1.1 billion debt due in 2026. Goldman Sachs is involved too for a potential sale of the company.

The business, which launched a bondholder identification process in August, is under pressure to tackle the 2026 maturity of its reinstated first and second lien secured notes, amid consistent cash burn and an unsustainable cash interest burden. It paid €42.6 million interest in the six months ended June 30 compared with €22.6 million paid a year prior, as reported.

Yesterday, Nov. 6, Selecta reported weak third-quarter earnings, reflecting a decline in its top line and an increase in costs. Net sales for the quarter declined by 5.8% to €275.4 million, reflecting the impact of its strategic intentional churn, or SIC, policy and a 2.1% decline in like-for-like volume. The company’s SIC policy began in 2023, and is defined as the termination of contracts that don’t meet the group’s financial thresholds, as well as client site closures.

The drop in adjusted EBITDA was even more pronounced, with the reported €43.3 million for the quarter coming in 30.8% lower than the same period of the prior year. Management stated that this was due to the group’s lower scale in top line combined with a 6% year-over-year increase in personal expenses off the back of European wage inflation. Additionally, other overheads rose by 4.6%. This resulted in a reported adjusted EBITDA margin for the quarter of 15.7%, compared with 21.4% a year earlier.