Distressed debt funds take an interest in Maxeda

Distressed debt funds take an interest in Maxeda

DIY group Maxeda cannot seem to get rid of Praxis, Formido and Brico. Now, several funds who are known for their harsh reorganizations are intervening.

No investments and huge restructuring

Maxeda cannot find a possible buyer for several of its chains, because it has huge debts. Over the past few years, market share dropped extensively and Hornbach and Bauhaus competition is ruthless. That is why Maxeda is trying to sell these stores.

 

However, the company is failing to do so and that has brought French Ardian and American Goldentree to the table. Both are funds known as "distressed debt funds" and have obtained a majority stake in Maxeda in return for 200 million euro of the company's debt, according to De Telegraaf.

 

'Distressed debt funds' usually only surface when a company is in dire straits and their only goal is to obtain as much money as possible, as fast as possible. Their usual approach is to get rid of the board and cut costs a lot, often at the expense of the employees. Investments are non-existent.

 

That would explain why the Maxeda CEO and its group director, Roy van Keulen, both recently left the company. French Guy Colleau is Maxeda's new CEO.

 

Hope for the future

However, Maxeda still has hope for the future. "The financial restructuring plan will considerably lower the company's debt and interest payments, leaving more room for growth", a spokesperson told De Telegraaf.

 

Previously, Maxeda was called Vendex KBB and it once used to own de Bijenkorf, Hema and V&D. However, in 2004, investment fund KKR paid 2.4 billion euro and took the company off the stock exchange. Later on, it sold Hema, de Bijenkorf, V&D and several other divisions, attracting more than 4 billion euro.