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After taking a step towards the banks during negotiations on Altice's €24 billion debt, billionaire Patrick Drahi has transferred an asset beyond their reach.

SFR's situation continues to worsen. The turnover of Altice France, the operator's parent company, fell by 4.7% in the third quarter to €2.5 billion, according to the results published on Wednesday, November 27. Its gross operating surplus (EBITDA) fell by 9.9% to €879 million. The drop in subscribers continues, with 106,000 fewer mobile subscribers and 53,000 fewer fixed-line customers compared to the previous quarter.

Not enough to reassure creditors, so in the middle of a standoff with Patrick Drahi to renegotiate the group's colossal debt. In mid-November, Patrick Drahi and his debt holders stopped negotiations on the €24 billion debt weighing on Altice France. The billionaire, owner of the telecoms operator SFR, had just placed his subsidiary XpFibre in an entity outside the scope of Altice France, which thus escapes its lenders. "You can't negotiate a debt on a company and empty it of its assets at the same time!" complains a source.

According to a person close to the case, "this is an attempt at extortion and blackmail, it is not in the company's interest to dispose of an asset". In the coming weeks, the lenders will open litigation, assures the same source. For Timothée Gagnepain, a lawyer specializing in debt restructuring for the firm McDermott Will & Emery, "funds want to maximize their profits and do not hesitate to go far and use the weapon of litigation."

An agreement in sight for Drahi and his creditors

The announcement could be a way for Patrick Drahi to exert pressure on his creditors. During the first round of discussions between the billionaire and the lenders of the 20 billion in secured debt, that is to say guaranteed by assets, each camp had taken a step towards the other. The head of SFR – and the 17th largest professional fortune in France – had said he was ready to immediately pay 2.6 billion euros in exchange for the cancellation of the old debt and the establishment of a new one, of 13.7 billion, at an average interest rate of 6.5%, and the postponement of the repayment deadlines to 2029 and 2031. That is a two-year breather compared to current maturities.

In return, the creditors could obtain 18% of the capital of Altice France. In a counter-proposal, the latter, led by the firms Gibson, Dunn & Crutcher and Rothschild & Co, asked for more: a new debt of 14.4 billion euros, an interest rate of 7.5% and an increase in capital to 34%.

A cooperation agreement

But the negotiations have not gone any further for the moment and Patrick Drahi preferred to transfer XpFibre out of their reach. "The discussions are extremely long because each creditor has divergent interests, no one bought the debt at the same price," puts into perspective an investment banker.

The creditors have joined forces in a "cooperation agreement", an instrument frequently used in the United States that allows them to speak with one voice. Nearly 95% of the creditors of the secured debt, or €18.5 billion of the €20 billion, have signed the agreement that runs until February 2026.

Patrick Drahi's Plan B

While waiting to find an agreement, Patrick Drahi, advised by the Lazard bank, is rolling out his Plan B, which will be implemented if the billionaire and his lenders do not find a compromise. "XpFibre has been placed in a basket on which the management of Altice France could raise new debt, explains a banker. This would take priority over the old debt. » In short, to repay his nearest instalments, Patrick Drahi could borrow again, on the entity that owns XpFibre and create a new pyramid of debts. Rumors are swirling around the Apollo fund.

Timothée Gagnepain reminds us that in this negotiation, everyone plays their part. "There is a lot of bluffing, poker moves and an escalation in the manifestation of a balance of power but each side has an interest in finding an agreement, everyone wants to save their skin and leave with as much money as possible, it is a classic financial game." The first round of negotiations is now closed, the poker game continues behind the scenes.

Après avoir fait un pas vers les banques lors de négociations sur la dette de 24 milliards d’euros d’Altice, le milliardaire Patrick Drahi a transféré un actif hors de leur portée.

La situation de SFR continue d’empirer. Le chiffre d’affaires d’Altice France, maison mère de l’opérateur recule de 4,7 % au troisième trimestre à 2,5 milliards d’euros, selon les résultats publiés ce mercredi 27 novembre. Son excédent brut d’exploitation (Ebitda) chute de 9,9 % à 879 millions d’euros. La chute d’abonnés se poursuit, avec 106 000 abonnés mobiles et 53 000 clients sur le fixe en moins par rapport au trimestre précédent.

Pas de quoi rassurer les créanciers, donc en plein bras de fer avec Patrick Drahi pour renégocier la dette colossale du groupe. Mi-novembre, Patrick Drahi et ses porteurs de dette ont stoppé les négociations sur la dette de 24 milliards d’euros pesant sur Altice France. Le milliardaire, propriétaire de l’opérateur télécoms SFR, venait de placer sa filiale XpFibre dans une entité en dehors du périmètre d’Altice France, qui échappe ainsi à ses prêteurs. « On ne peut pas négocier une dette sur une société et la vider de ses actifs dans le même temps ! » s’agace une source.

Selon un proche du dossier, « il s’agit d’une tentative d’extorsion et de chantage, ce n’est pas dans l’intérêt de la société de se départir d’un actif ». Dans les prochaines semaines, les prêteurs vont ouvrir des contentieux, assure cette même source. Pour Timothée Gagnepain, avocat spé­cialisé dans la restructuration de la dette pour le cabinet McDermott Will & Emery, « les fonds veulent maximiser leurs profits et n’hésitent pas à aller loin et à utiliser l’arme du contentieux ».

Un accord en vue pour Drahi et ses créanciers

L’annonce pourrait être une manière pour Patrick Drahi d’exercer une pression sur ses créanciers. Lors du premier round des discussions entre le milliardaire et les prêteurs des 20 milliards de dette sécurisée, c’est-à-dire garantie par des actifs, chaque camp avait fait un pas vers l’autre. Le patron de SFR – et 17e fortune professionnelle de France – s’était dit prêt à verser immédiatement 2,6 milliards d’euros en échange de l’annulation de l’ancienne dette et la mise en place d’une nouvelle, de 13,7 milliards, à un taux d’intérêt moyen de 6,5 %, et du décalage des échéances de remboursement à 2029 et 2031. Soit un ballon d’oxygène de deux ans par rapport aux maturités actuelles.

En contrepartie, les créanciers pourraient obtenir 18 % du capital d’Altice France. Dans une contre-proposition, ces derniers, emmenés par les cabinets Gibson, Dunn & Crutcher et Rothschild & Co en demandaient davantage : une nouvelle dette de 14,4 milliards d’euros, un taux d’intérêt de 7,5 % et une montée au capital à 34 %.

Mais les négociations ne sont pas allées plus loin pour l’instant et Patrick Drahi a préféré transférer XpFibre hors de leur portée. « Les discussions sont extrêmement longues parce que chaque créancier a des intérêts divergents, personne n’a acheté la dette au même prix », met en perspective un banquier d’affaires.

Les créanciers se sont coalisés dans « un accord de coopération », un instrument fréquemment utilisé aux Etats-Unis qui leur permet de parler d’une seule voix. Près de 95 % des créanciers de la dette sécurisée, soit 18,5 milliards d’euros des 20 milliards d’euros, ont signé l’accord qui court jusqu’en février 2026.

En attendant de trouver un accord, Patrick Drahi, conseillé par la banque Lazard, déroule son plan B, qui sera appliqué si le milliardaire et ses prêteurs ne trouvent pas de compromis. « XpFibre a été placé dans un panier sur lequel le management d’Altice France pourrait lever de la nouvelle dette, explique un banquier. Celle-ci serait prioritaire par rapport à l’ancienne dette. » En clair, pour rembourser ses échéances les plus proches, Patrick Drahi pourrait s’endetter à nouveau, sur l’entité qui détient XpFibre et réaliser une nouvelle pyramide de dettes. Des rumeurs bruissent autour du fonds Apollo.

Timothée Gagnepain rappelle que dans cette négociation, chacun joue sa partition. « Il y a beaucoup de bluff, de coups de poker et une escalade dans la manifestation d’un rapport de force mais chaque camp à intérêt à trouver un accord, chacun veut sauver sa peau et partir avec le plus d’argent possible, c’est un jeu financier classique. » Le premier round des négociations étant désormais fermé, le jeu de poker se poursuit en coulisses.

Italian authorities shut down €3bn-a-year pirate TV ring

Projects are being reassessed because of regulatory uncertainty, slow permitting and high costs

Many hydrogen projects will be canceled or delayed as the industry’s growth potential recalibrates, the chief executive of electrolyzer company Thyssenkrupp Nucera NCH2 2.03%increase; green up pointing triangle said.

A reckoning is underway after hopes around hydrogen, especially so-called green hydrogen—which is produced using renewable energy—lost steam due to regulatory uncertainty, slow permitting and high costs.

Businesses and governments looked to hydrogen produced with renewable energy as a lever for decarbonizing heavy industry and transportation, but some are now casting doubt on its viability in the short term and putting projects on hold.

Companies announced plans for more projects than they could build, Thyssenkrupp Nucera Chief Executive Werner Ponikwar said in an interview. Availability of funding isn’t an issue, but projects don’t reach a phase where its developers decide to invest, he said.

Donald Trump’s U.S. election victory added another layer of unpredictability, Ponikwar said. However, hydrogen likely faces a lower risk under the incoming administration than other programs covered by the Inflation Reduction Act, he said, referring to President Biden’s signature climate law.

“In the next five years, we talk about maybe 400 gigawatts of announcements in terms of electrolyzers that should be up and running. This is just impossible,” Ponikwar commented. Electrolyzers are machines that split water molecules into hydrogen and oxygen.

The consensus is that the electrolyzer capacity that will be built in that period will be around 100 gigawatts, according to Ponikwar.

The International Energy Agency said last month the total electrolyzer capacity with committed investment stood at 20 gigawatts globally, including 6 gigawatts in the past year.

Total announced investments in hydrogen projects through 2030 amount to $680 billion, but the sum falls to $75 billion when taking into account those with committed funding, according to a report by industry group Hydrogen Council and consultancy McKinsey.

“It’s just a recalibration, a very natural maturing process of an embryonic industry,” Ponikwar said. “We shouldn’t be too surprised about that and we shouldn’t be too concerned.”

Saudi Arabia’s futuristic city, Neom, is the biggest project for the production of hydrogen with renewable energy that Thyssenkrupp Nucera is involved in. Ponikwar doesn’t anticipate any delays in that project.

Nevertheless, the company sees the U.S. and Europe as the markets with the biggest potential, even if Ponikwar cautions that their development is restrained by regulatory uncertainty.

As President-elect Donald Trump prepares his return to the White House, hydrogen project developers are still waiting for rules on tax credits under President Biden’s Inflation Reduction Act to be finalized, Ponikwar said.

“Certainly, the expectation is that the new [U.S.] government will consider changes on the different rules and regulations but that remains to be seen,” Ponikwar said.

Shares in Thyssenkrupp Nucera have fallen about 15% since Nov. 5, the day of the U.S. election.

In Europe, project developers are waiting for new rules to be implemented too, Ponikwar said. He urged the European Union to relax market rules to help the industry grow.

“This should be done very quickly, because we cannot afford another two years of debates and discussions in the European Union before anything is agreed or decided on,” he said. Such changes would allow for the production of hydrogen at a lower cost, Ponikwar said. Steelmaker ArcelorMittal and utility RWE this month said the European hydrogen market wasn’t progressing as quickly as expected.

Thyssenkrupp Nucera outsources a lot of its manufacturing to third parties, reducing the risk of sitting on underutilized assets, Ponikwar said.

Its initial public offering included two million shares priced at $15.00 each, raising $30 million

A Canadian company mining a key fertilizer for grain crops in Brazil’s Amazon region is set to have its shares traded in the U.S. starting on Wednesday.

Toronto-based Brazil Potash GRO -7.40%decrease; red down pointing triangle shares will trade on the New York Stock Exchange at $15 each, the company’s Chief Executive Matt Simpson said after the company raised $30 million selling 2 million shares late Tuesday.

Brazil Potash plans to extract potash, an important nutrient for plants, from deep under the Amazon soil.

Extraction is set to start by 2029 after an extended licensing process, Simpson said. The mine is located near Brazil’s farm belt and will supply a major global breadbasket.

“It is going to be massive for global food security,” he said.

Brazil Potash is spending $2.5 billion on construction costs. The company expects to extract 2.2 million metric tons a year.

The company had around $405,000 in cash as of October, it said in a regulatory filing with the Securities and Exchange Commission. Working capital was around $4.3 million, with liabilities of $5.5 million. Brazil Potash expected to use part of the IPO proceeds to pay off debt and anticipated spending approximately $25.5 million in the next 12 months.

Simpson said the mining operation is located in an area covered by pastures and won’t cut into the Amazon rainforest, a major carbon-dioxide sink. Mining will happen underground, “with a very small footprint on the surface,” he said.

Brazil Potash’s mine is near the town of Autazes, in the southeastern part of the state of Amazonas, which is twice as large as Texas. The location is close to waterways and roads already used by grain exporters moving their cargo toward sea ports via trucks and river barges, Simpson said.

“Instead of those barges coming back empty we are going to load them with our potash and just reverse the route,” curbing the operation’s carbon footprint, he said.

The operation’s entire production is expected to be sold domestically. Brazil is a net importer of fertilizer.

According to government data, Brazilian importers paid more than $3.3 billion for 12.2 million tons of potash chloride this year through October. That compares with 11.2 million tons for $4.3 billion in the same period a year earlier.

Economic sanctions against potash exporters Russia and Belarus in 2022 pushed the commodity’s price higher, while increased production in the following year had the opposite effect, the U.S. Geological Survey reported in January.

A 2020 report published by Brazil’s government said that potash was the fertilizer local farmers used the most, and 94% of it was imported. Canada is one of the main sources, along with Russia, Israel and other countries.

Simpson said that trade restrictions threatened by President-elect Donald Trump in the U.S., and potential retaliation from trade partners, are likely to increase Brazil’s role as a global food supplier. That, in turn, would make locally produced fertilizers more valuable.

“Those kinds of actions by the new administration could even further reinforce the importance of this project,” he said.

The operation is connected to Brazil’s national power grid, which is about 85% renewable energy.

Autazes has one of Brazil’s largest reserves of sylvinite, the mineral from which potash is extracted, according to the Brazilian Mining Association.

Mosaic Co., headquartered in Tampa, Fla., and Singapore’s Verde AgriTech, also produce potash in Brazil.

Commercial buyers ‘go into panic mode’ to secure high-quality arabica beans

Coffee climbed to its highest in nearly 50 years on Wednesday as concerns over a global supply shortage added to market uncertainty over the impact of incoming EU laws on deforestation.

Futures tracking higher-quality arabica beans rose 4.7 per cent to $3.23 a pound in New York, their highest levels since 1977, to extend the rally in prices this year to more than 70 per cent.

London futures for cheaper robusta beans, used in instant coffee, rose 7.7 per cent to reach $5,507 a tonne, nearly double their price at the start of the year.

Traders said the move had been driven by coffee roasters, commercial buyers who process beans for consumption, aiming to secure supplies ahead of likely shortages and uncertainty over the status of a new EU law that bans using deforested land for crops.

“I have never seen anything like this before,” said Tomas Araujo, trading associate at brokerage StoneX. “This is not going to be resolved this year and that’s why the roaster has started going into panic mode.”

Hot and dry weather in Brazil has stoked concerns that output from the world’s biggest arabica producer will fall next season, reducing tight global supplies. The country suffered its worst drought in 70 years in August and September, followed by heavy rains in October, leading to concern the flowering crop will wither.

This follows three consecutive years of supply deficit for robusta beans, as a result of poor weather in Vietnam, the biggest robusta-producing country. Brazil’s 2025-2026 arabica harvest looks set to fall short, just when the industry was banking on it to put the market into a supply and demand surplus, Araujo added.

The rush to secure raw material has been exacerbated by European importers buying up beans earlier than usual this year, as they grapple with uncertainty over new EU legislation which requires them to prove the coffee they import into the bloc was not grown on deforested land.

EU authorities are due to apply a 12-month delay to the legislation, which comes into effect at the start of the new year. However, lawmakers in the bloc have also proposed amendments to the law, but are opposed by member states. An agreement is not likely until mid December. Traders are concerned the delay may not be approved, or would come late to be recorded in law by the end of the year.

With European roasters rushing to build their inventories for next year, “US roasters have come into the market too to make sure they do not get priced out,” Araujo said.

US roasters are also responding to president-elect Donald Trump’s promise to impose import tariffs on a range of goods once he takes office in January, said Carlos Mera, head of agricultural commodities at Rabobank.

“If you are a roaster and you believe that there will be tariffs on coffee, you will try to import now, because otherwise you will be paying tariffs later,” said Mera, adding that about 23 per cent of global exports go to the US.

Consumers, already facing higher coffee prices, should expect to see further increases, Mera said. “The increase in prices we’ve seen recently are not because of the latest rally, but the last one,” he said, referring to the surge in robusta prices earlier this year. “So there is still much more pain coming for consumers.”

The car maker unites autos and luxury in a way that makes rivals feel downmarket, while its exposure to China’s faltering economy is more

Ferrari is synonymous with the “rosso corsa” red on its supercars—and right now, investors in Ferrari are seeing red as well. But after a recent decline, the stock may be getting ready to rally again.

At first glance, shares of the Italian auto maker, which are up nearly 28% in 2024, have done just fine, especially compared with other luxury goods and high-end car makers. LVMH Moët Hennessy Louis Vuitton and Gucci owner Kering have fallen 21% and 45%, respectively, while Mercedes-Benz Group has declined 21%, as weak consumer spending in China drags on their sales.

But with Ferrari down 13% since the end of August, it’s fair to wonder if similar troubles have caught up with the company. Investors needn’t worry—Ferrari still trumps furs and fragrances. With its million-dollar cars, it unites autos and luxury in a way that makes others feel downmarket, while its exposure to China’s faltering economy is more limited. What’s more, the Maranello-based company’s latest car, the $3.8 million F80, is set to deliver a significant earnings boost that could help Ferrari shares gain 30% from here.

Ferrari’s success begins with where it sells cars. China, Taiwan, and Hong Kong accounted for just 8% of Ferrari shipments over the first nine months of 2024—for Mercedes, it was 35%. That means that even though Ferrari’s China shipments are down 22% this year, single-digit growth in other regions has led to earnings growth.

There are reasons for the underexposure. Ferrari feels that would-be buyers in China still need “more time to know and get acquainted with our brand,” chief marketing and commercial officer Enrico Galliera tells Barron’s. He adds that it was hard to compare China with other markets, given its high level of taxation on luxury goods. Beijing introduced a 10% levy on supercars in 2016, and in October its ministry of commerce said it was considering hiking tariffs on some imported vehicles.

It’s worth noting that the 85-year-old company entered China in 1992. LVMH opened its first boutique in Beijing the same year—and the region containing China has become the French conglomerate’s biggest market, making up more than 30% of its revenue.

But Maranello has always been careful not to flood the zone with its wares. Founder Enzo Ferrari often pledged to “always deliver one car less than the market demands,” reflecting the tight control on shipments that has helped maintain the brand’s cachet. “What we do in China is more or less the same as other markets. We never want a huge influx of cars if demand just isn’t there,” says Galliera.

Granted, there’s a chance the blessing of low exposure to China turns into a curse. Beijing has unveiled numerous stimulus measures in a bid to boost growth, and there could be more to come. If that causes China’s economy to blow hot again, Ferrari’s lack of presence there could leave it trailing its peers.

Valuation could be another speed bump. The stock fetches 48 times future earnings—higher than its beaten-down rivals, although that figure was as high as 51.5 in October. Shares dropped in November despite a third-quarter earnings beat: Investors are so used to outperformance they were expecting a year-end guidance hike. The stock now trades at the valuation it had back in February.

But a once-in-a-generation new model means dips like that are a buying opportunity. Ferrari unveiled the F80 in October. It should help shares to keep lapping the field even if Chinese consumer spending rebounds.

The F80 is hardly a humble station wagon. It has a top speed of nearly 220 miles an hour and goes from zero to 125 miles per hour in under six seconds. Its engine runs off tech used in Formula One.

It should appeal to investors as well as car fanatics. Ferrari has already filled its order book for all 799 F80 cars and is set to start shipping them late next year, when sales of the near-$4 million model will start showing up in earnings reports. Analysts expect earnings per share to grow 10% to 8.89 euros ($9.34) in 2025.

Just how big the boost is depends on the F80’s margin, which Galliera says would be “top of the offering” among Ferrari’s cars.

Wall Street is bullish, too. Anthony Dick, who covers the automotive sector for the Paris-based private bank and asset manager ODDO BHF, tells Barron’s that margins on the F80 are likely to be so high that it could account for 2% of units sold but 20% of all profit.

Red-hot demand for the supercar shows Ferrari’s “best-in-class pricing power,” speaks to the brand’s cachet and loyal customer base, and signals it will carry on dodging the slowdown plaguing other car and luxury-goods makers, he says. Since the F80’s unveiling, Dick, who rates the stock a Buy, has raised his price target on the Italy-listed shares to €475 from €445, implying it could climb 15% from current levels.

He’s not alone. Half the analysts covering the stock rate it a Buy, and just 8% have it at Sell despite this year’s rally. Some have even loftier price targets—the Street’s biggest bull, Evercore ISI’s Michael Binetti, argues that Ferrari’s U.S.-listed shares could jump 30% to $565 thanks to the F80.

At nearly $4 million, owning the supercar might be a pipe dream. Buying Ferrari stock could be the next best thing.