Creditors to Patrick Drahi’s Altice International have sued the company and several linked entities, alleging that the French-Israeli billionaire illegally moved assets worth billions of dollars out of the reach of lenders owed €8bn. Lenders including Elliott Management and London-based credit funds Sona Asset Management and Arini Capital Management filed a lawsuit in the Supreme Court of the State of New York on Tuesday, in the latest escalation of a long-running battle between the heavily indebted telecoms group and its creditors. In July, the creditors accused Altice International of defaulting on more than €2bn of debt, claiming that a series of transactions breached key terms of its borrowing agreements.
Tuesday’s lawsuit is the latest challenge to Drahi following a similar suit last month launched by creditors to his US business, including Apollo Global Management and Oaktree Capital, who argued he was “personally liable” for a “brazen” plan to shift the company’s most valuable cable television assets out of the reach of bondholders. Altice declined to comment. Altice has separately sued the US bondholder group for forming what it said was an “illegal cartel” by banding together to negotiate a restructuring as a unified bloc.
The bondholders have denied those claims and have sought to dismiss the lawsuit. Drahi, a Franco-Israeli telecoms mogul whose sprawling group borrowed more than $60bn of debt in an era of cheap money, has for years been in heated negotiations with creditors across his business empire as he attempts to renegotiate his borrowings. Last year, Drahi shifted Altice International’s Portuguese and Dominican operations out of the pool of assets available to creditors if debt is not repaid, in a move dubbed as “super aggressive” by one bondholder at the time.
The assets, Altice Portugal SA and Altice Caribbean Sarl, account for about 80 per cent of Altice International’s earnings. “Defendants have fraudulently transferred billions in value to other entities ultimately owned and controlled by Drahi,” the creditors alleged in their filing. “Those assets and their value should be available to repay creditors. But following Defendants’ transfers, those assets lie outside creditors’ reach and instead indirectly line the pockets of Drahi,” they added. In a move similar to that at Altice International, Drahi’s US cable company earlier this year shifted valuable pay-TV and broadband assets away from the reach of creditors, aggravating tensions with some of Wall Street’s biggest asset managers.
Drahi in June agreed a €20.35bn deal to sell the French arm of his telecoms business, SFR, to a consortium of rival operators composed of Bouygues Telecom, Iliad and Orange, with the deal currently subject to regulatory clearance. The deal followed a restructuring that saw SFR-parent Altice France’s debt reduced from €24bn to €15.5bn, following a negotiation with creditors.
Source: Financial Times Companies · Summarized by HeadlinesBriefing