(Bloomberg) -- Creditors including hedge fund Arini are set to take over Consolis from Bain Capital as part of an effort to slash €300 million ($323 million) in the building materials company’s net debt. 

Consolis agreed to a deal under which it will receive €115 million in additional liquidity from creditors via various facilities, according to a statement Saturday. At the same time, bondholders will see their holdings swapped for equity and Bain’s stake in the business will shrink to 4% after the transaction closes.  

Arini is part of the creditor group that supports the plan and which combined holds around 66% of the value of the bonds, according to a person familiar with the matter. The fund, founded by former Credit Suisse trader Hamza Lemssouguer, gave Consolis a €30 million super senior loan to support the company in 2022, Bloomberg previously reported. That loan will be fully refinanced under the proposal. 

Arini declined to comment on Consolis’ proposed debt restructuring. 

Consolis, which makes precast concrete, has been struggling with a downturn in the property market across Europe since the rise in interest rates, which has sapped demand for residential construction.  

Consolis anticipates the transaction to close in the third quarter, with lenders providing €70 million in interim liquidity while negotiations are ongoing. Lenders will then provide €186 million in funds once the deal is wrapped up, which all bondholders have the opportunity to participate in. Consolis also plans to skip a coupon payment on its €300 million bonds due on May 2, which is subject to a grace period. 

Bondholders outside of the group can receive an early-bird fee if they agree to the plan by May 24. 

First-quarter sales slumped 26% to €216 million, Consolis said in a separate statement Saturday. A sale-and-leaseback transaction boosted free cash flow to €13.6 million, but barring that transaction Consolis saw negative working capital in line with seasonality and lower adjusted earnings. 

Consolis was advised by Lazard Inc. and Kirkland & Ellis, while the lender group was advised by Perella Weinberg Partners and Akin Gump Strauss Hauer & Feld. 

(Updates with details of Arini exposure from first paragraph.)

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