A growing number of distressed French private equity portfolio companies – including EQT-owned care home group Colisée and lab operator Cerba – are attracting attention from hedge funds, according to a report by the Financial Times.
According to restructuring advisers and distressed debt investors, between 15 and 20 French mid- and large-cap businesses are under close watch, amid a perfect storm of macroeconomic pressure, rising interest rates, and regulatory change, with liquidity and leverage issues driving a wave of potential restructurings. The majority are private equity-backed.
Both Colisée and Cerba are in or nearing restructuring talks, while other groups facing similar challenges include Emeria, a real estate services company backed by Partners Group, and Ingenico, a payments business owned by Apollo.
“This year, interest from UK and US credit funds in French distressed situations has surged,” said Olivier Sibenaler, a restructuring expert at AlixPartners. “We’re seeing new enquiries almost weekly.”
The surge in distress reflects broader economic headwinds. The Bank of France reports that business bankruptcies have reached their highest levels since 1991. Companies that benefited from generous Covid-era state loan support are now facing refinancing challenges under tighter financial conditions.
France is also notable for its heavy use of leveraged buyouts. From 2015 to 2024, over 4,600 LBOs were recorded—far more than in Germany or Italy – concentrating risk in sectors like retail, telecoms, and healthcare.
Recent legal changes have further reshaped the restructuring landscape. The 2021 adoption of EU insolvency directives has empowered creditors via mechanisms like cross-class cramdowns, making it easier to push through restructurings without shareholder consent. These tools are proving attractive to distressed credit investors seeking equity conversions through restructuring.
“There’s a lot to do in France,” one European credit hedge fund investor commented. “It’s becoming a very interesting market for distressed players.”
Recent high-profile French restructurings – Casino, Orpea, and Altice – have paved the way. Now, attention is shifting from listed companies to heavily indebted private equity-owned firms, where debt prices are already trading at distressed levels.
Cerba’s bonds have tumbled amid deteriorating performance, with its secured 2029 notes trading around 76 cents on the euro, and unsecured debt plunging as low as 22 cents, according to Bloomberg data. Colisée’s debt has also seen a sell-off, with high-yield investors exiting and distressed hedge funds expected to move in.
