French private school operator Omnes Education is looking to refinance around €700 million ($785 million) of debt, according to a person familiar with the matter. The effort comes against the backdrop of the most serious student unrest in France in years, with protests in the public sector over funding and classroom conditions.
Most of the bank debt is set to mature in April 2028, according to the latest consolidated accounts of Educin Topco, the holding company for the Cinven-owned higher-education firm. The group also reported €216 million in convertible bonds, which mature in April 2029. The company generates annual earnings before interest, taxes, depreciation and amortization of €95 million, the person said. Existing lenders include Goldman Sachs, PSP Investments, M&G, and Clearlake Credit.
The planned refinancing comes during a challenging period for France's school system. France is already grappling with inflation pressures and a ballooning budget deficit, and the upcoming presidential race could add to political instability. High interest rates are also leaving private credit borrowers with heavier debt bills. Decreasing government subsidies have been a slow burner for education-focused businesses, but the ongoing protests mark a tipping point that has dented sentiment around the sector.
Market appetite for education assets was once strong, as shown by Ardian's buyout of a majority stake in AD Education in 2020. Lately, however, AD Education's term loan B price has drastically decreased, hurt by changes in French subsidies and the growing use of artificial intelligence in educational methods. Omnes benefits from a state-backed apprenticeship program, potentially leaving it exposed to further government spending cuts. Borrowers may have little choice but to sell or refinance as the sector continues to face challenges. Representatives for the named lenders and Cinven declined to comment, and Omnes did not respond to a request for comment.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing