(Bloomberg) -- Both Altice France and a group of its creditors have started working with financial and legal advisers, amid a deepening stand-off between the telecoms firm and its lenders over the fate of the company’s debt load.

On the company side, Altice is talking to Lazard Inc., while some bondholders — including Attestor Capital and Arini — are in discussions with advisers Houlihan Lokey Inc. and law firm Milbank LLP ahead of debt talks with the company, according to people familiar with the matter. 

A mix of alternative and long-only credit funds that hold about €1.5 billion ($1.6 billion) of Altice France’s debt has been coalescing over the past few weeks, the people said. They’ve been casually discussing a liability management exercise for the company, but the talks to form a formal group picked up pace after the French telecommunications company told investors they’ll suffer haircuts, they said.

Representatives for Houlihan, Altice, Arini and Attestor declined to comment on the matter. A spokesperson for Milbank didn’t immediately respond to requests for comment. 

On Wednesday, management announced a plan to speed up the company’s deleveraging after agreeing to sell the media division last week. Altice France’s unsecured bonds plunged 21 cents on the euro and are now indicated at less than half of their face value, according to data compiled by Bloomberg. 

Read more: Billionaire Drahi Cornered by Debt Mountain, Corruption Scandal

The company reported a debt ratio of 6.2 times its earnings at the end of 2023. It will need creditors to participate in “discounted transactions” to bring leverage down to 4 times. In November, management said they were seeking to bring debt down to 4.5 times earnings. 

Bondholders in the group talking to advisers have cross-holdings of secured and unsecured debt, with maturities concentrated in the notes due in 2027 and 2028. 

Asset Sales

Altice France, which controls SFR, is one of the three silos of the telecommunications and media empire that billionaire Patrick Drahi cobbled together over 30 years. The company is now looking to sell assets as it faces mounting pressure to reduce a debt pile of almost €25 billion. 

Read more: The Corruption Probe Rocking Altice Tycoon’s Empire: QuickTake

Altice’s executives are also involved in a probe into potential corruption and money laundering in Portugal and France. Altice has said it’s a victim of the alleged wrongdoings and that it would collaborate with the judicial authorities.

--With assistance from Laura Benitez.

(Retops story, updates with Lazard appointment in graf 2)

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