Patrick Drahi's Altice International is at the center of a contentious debt dispute, with creditors alleging a default on €2 billion ($2.1 billion) of debt. This accusation stems from a complex restructuring process that has seen Drahi shift billions of euros worth of assets out of reach of existing creditors. One investor described Drahi's approach as "super aggressive," claiming he effectively took €5 billion ($5.3 billion) in value from creditors by reorganizing ownership across various Altice entities and securing new private debt against ring-fenced assets.
Altice France, a significant part of Drahi's larger €60 billion ($64 billion) global debt pile, entered accelerated safeguard proceedings in Paris last year to renegotiate debt and avoid formal insolvency. These actions have structurally subordinated some existing bonds, reducing potential recoveries for bondholders if the company defaults. This has led to a sharp drop in Altice bond prices and increased investor wariness, with some pushing for tighter covenants and greater transparency, while others consider legal challenges.
The ongoing troubles at Altice France are contributing to an expected surge in Europe's high-yield default rate. JPMorgan predicts the rate will climb to 5% this year, up from 3.3% in 2024, if crises at companies like Altice France and Thames Water materialize. Analysts at JPMorgan stated their forecast is "heavily dependent on outcomes" of restructuring talks at Altice France, which currently has a €24 billion ($25.6 billion) debt burden. Credit default swaps data on Bloomberg indicates investors are pricing a 61% chance that Altice France will default on its debt.
Critics argue that Drahi's strategy aims to buy time and maintain flexibility by isolating higher-quality assets to secure fresh financing. While supporters claim this improves the group's long-term survival prospects, the dispute is seen as a test case for how far owners can go in protecting assets during complex telecom restructurings, with implications for lenders and operators across the market.
