Patrick Drahi built a telecom behemoth fuelled by leverage, then nearly lost it all to creditors

SFR's lenders took 45% of Altice France in court. Eight months later, three rivals agreed to split it for €20.35bn.

By EURx · 12 October 2026

Editor's note: we covered the wider Altice group and the Altice International dropdown on 3 October (see that summary).

Key terms

Company: Altice France S.A., which runs SFR, France's second-largest telecoms operator. Top borrowing group is Altice France Lux 3
Process: Nine accelerated safeguard plans (sauvegarde accélérée) in the Tribunal des activités économiques de Paris, opened 10 June 2025, approved 4 August 2025, implemented 1 October 2025
Reinstatement: About €8.6bn of debt extinguished, taking net debt to about €15.5bn, with maturities pushed out to 2028-2033
Equity: Creditors took 45% (31% to Altice France secured creditors, 14% to Altice France Holding unsecured noteholders). Drahi kept 55% plus warrants for up to 25% more
Vote at SFR SA: Both affected classes approved with 100% of votes cast
US recognition: Chapter 15, In re Altice France S.A., 25-11349 (Bankr. S.D.N.Y.), enforcement order 30 September 2025
Sale: MoU signed 6 June 2026 with consortium of Bouygues Telecom (~42%), Free-Iliad (~31%) and Orange (~27%) at €20.35bn enterprise value, all cash. Closing targeted for the second half of 2027
Today: Consolidated net debt €15.9bn, 5.9x LTM EBITDA, liquidity €430m as of 30 June 2026

How we got here: a debt-happy, telecom roll-up reckons with fierce competition

Patrick Drahi founded the holding company for Altice in 2001 and spent the next dozen years buying cable and telecom assets with debt, more than twenty of them between 2002 and 2013: Numericable in France, Portugal Telecom, Israel's HOT, and operators in Switzerland, Belgium, Luxembourg and French overseas territories. The biggest step was SFR. In the spring of 2014, Altice's Numericable outbid Bouygues for the business being sold by Vivendi, paying more than €17bn for the business, financed in part by a €7.9bn junk bond, the largest high-yield offering ever sold at the time. A year later Altice crossed the Atlantic, buying Suddenlink for $9.1bn in 2015 and Cablevision for $17.7bn, subsequently merging those businesses into Altice USA, now called Optimum†.

In the mid-2010s, Drahi's debt-fuelled ambition met with reality. SFR lost two million subscribers between 2014 and 2016, caught between Orange, the largest operator in the market, and Iliad's Free, whose cut-price mobile offers reshaped the French market. Revenue and adjusted EBITDA fell every year through 2024 — from 2022 to 2024, group revenue dropped from €11.38bn to €10.37bn, and adjusted EBITDA fell from €3.95bn to €3.43bn. Since the company couldn't grow organically, it continued to bolt on smaller rivals (using incremental debt). The cap stack was becoming unsustainable.

By March 2023, net debt had reached €23.1bn and the company was pointing to a leverage target of 4.5x. Then on 20 March 2024, on the Q4 2023 earnings call, management went further. The new target was below 4x, and the company said creditors would have to take part in discounted buybacks and exchanges to achieve it. In addition, any asset-sale proceeds would remain unspent until a comprehensive solution was agreed with bondholders. Bonds fell about 20 points during the call. Secured notes ended the quarter near 70 cents and unsecured 2028s went from the 60s to the 30s as S&P / Moody's cut the group rating to CCC. From that point, lenders organised; by mid-2024 secured and unsecured groups had separately organised and hired advisers. A restructuring became an inevitability; the framework came together over the winter, and the nine safeguard plans opened in June 2025.

Altice France chooses conciliation and sauvegarde

Going into safeguard, Altice France had two fully drawn RCFs totalling €1.206bn (maturing April 2026 and January 2028), seven term loan B tranches of ~€7.36bn (maturing July 2025 to August 2028) and eleven high-yield bonds of ~€11.29bn (maturing February 2027 to October 2029). All of it ranked pari passu and was guaranteed by SFR SA and seven other subsidiaries. Above that, Altice France Holding (the unsecureds) had four bond issues of ~€1.82bn and $2.66bn aggregate size.

With secured bonds/loans due in July 2025 and revenue still falling, the stack was not going to refinance. Creditor groups had already hired advisers: the unsecured noteholders (reportedly including Attestor and Arini) were working with Houlihan Lokey, the secured creditors were advised by Rothschild and Gibson Dunn, and a cross-holder group was working with Milbank, Houlihan Lokey and Willkie Farr & Gallagher. The Gibson Dunn co-op (as it later became known) eventually grew to about 200 institutions representing ~€19bn of secured debt and reportedly included Pimco, Elliott, BlackRock, Anchorage, UBS Asset Management, Sona, Carlyle and Sculptor.

The framework agreements were signed on 25 February 2025. Holders who signed by 19 March got a 2.5% early-bird premium, and by then the signatories held more than 90% of the TLBs and the secured and unsecured bonds. That was enough to do the holdco deal out of court. The 90% sign-up with a 2.5% early-bird premium is the French version of the pre-wiring that runs through big US sponsor-backed deals, where a cooperation agreement locks up a supermajority months ahead through a private consent solicitation and credit agreement amendment. To deal with the holdouts and manage unanimity requirements for certain debt instruments, French restructuring law has the concept of conciliation, a confidential court-supervised negotiation period, following which a company can request to enter an accelerated safeguard proceeding to put the holdouts to a vote. Altice France opted to handle its loose ends this way.

On 10 June 2025, the court opened nine separate proceedings: Altice France, SFR SA and seven other guarantors. SFR SA's affected claims were its guarantees: €1.20bn for the RCFs, €10.90bn for the bonds and €7.08bn for the TLBs, €19.17bn in total. The administrators split them into two classes, the RCF guarantee (class 1, €1.22bn with interest) and the TLB and bond guarantees together (class 1bis, €18.22bn). Suppliers, employees, tax and intragroup claims were left alone.

Voting ran electronically from 16 June to 8 July 2025. Class 1 turned out 100% and class 1bis 95.16%, and both voted 100% in favour of votes cast. Because nobody voted against, the best interests test did not formally apply, though the mandataires, the court-appointed officials who represent creditors' interests in French safeguard proceedings, ran it anyway and said the plan beat the alternatives.

Secured lenders took cash, new debt and 31% of the equity

On 1 October 2025, Altice France announced the completion of the financial restructuring. The company paid about €2.5bn in cash (€1.4bn of principal, €0.67bn of accrued interest and €0.44bn of premium) to holders of the extinguished Altice France and holdco debt, issued €15bn of new secured debt and refinanced its €1.2bn RCF. Drahi's holdco kept 55% and received warrants over up to 25% more of AF Lux 3: 5% struck at a €12bn equity value, 10% at €14bn and 10% at €16bn, exercisable only on an exit or a cash upstream above those levels, with a longstop of 30 September 2032. Full exercise would take him from 55% to 64%. The court noted that creditors also got a preference share and pledges over the Luxembourg holding companies, which gives them "a simple and quick way to take full control of the group" without touching the operating companies.

Each €1 of Altice France secured debt received about 7.6c in cash plus accrued interest; 77c of new secured debt with maturities extended by 2.75 years and a margin/coupon increase of ~137.5bps; and a share of 31% of the common equity. Holdco noteholders got about 2.5c in cash, 20.0c of new AF Lux 3 notes due January 2033 at a 9.125% euro coupon (or the dollar equivalent) and 14% of the equity, plus contingent value rights.

Two independent directors joined the board on implementation: Pierre-André de Chalendar, the former Saint-Gobain chairman, and Nick Read, the former Vodafone CEO.

Two weeks after closing, an M&A bid

The restructuring closed on 1 October 2025. On 14 October, Bouygues Telecom, Free and Orange offered about €17bn for most of SFR, a bid Altice rejected the next day as too low.

Asset sales carried on in the meantime. Altice sold its 50% of Infracos, the passive tower joint venture with Bouygues, to Phoenix Tower International. That closed on 22 December 2025 and €279m went to repaying debt across all secured notes and term loans on 9 January 2026. The 65% stake in Intelcia, the customer service outsourcer, went to its management and closed on 28 April 2026.

On 16 April 2026 the consortium came back with a bid valuing SFR at €20.35bn (excluding an earn-out), and got exclusivity to 15 May. That was extended to 5 June and the MoU was signed on 6 June.

The buyers proposed carving up both the customers and the network

The perimeter is 100% of SFR SA and the MVNOs (Coriolis, Syma, Prixtel and Réglomobile), covering everything SFR does in mainland France, for 100% cash. SFR Fibre and Completel are to merge into SFR SA before closing. Altice France keeps the overseas businesses (SRR and FOT), Altice Technical Services, its 50% of XpFibre and UltraEdge.

Bouygues takes all of B2B. Consumer customers are shared three ways: infrastructure and spectrum are shared, except SFR's mobile network in less dense areas, which goes to Bouygues. Orange is the only buyer that has published its share in detail: about €5.6bn for roughly 4m mobile and 1m fixed customers, all of SFR's prepaid base, the Coriolis, Syma and Réglo brands and 47 MHz of spectrum. Those customers made about €1.7bn of revenue and €0.6bn of EBITDAaL in 2025.

Orange's share includes an earn-out of up to about €0.2bn, a downward price adjustment with exit rights under a "safety clause" available to both sides, a net debt adjustment on closing accounts and adjustments tied to the seller meeting its regulatory and investment commitments until closing. Break fees are shared equally by the buyers, and Orange's part runs from about €0.03bn up to about €0.7bn depending on who walks and when. The buyers have also committed to keep all staff in the acquired perimeter employed until early 2029.

SFR keeps losing customers while the deal heads towards closing

In Q2 2026, revenue fell 8.7% to €2,034m and EBITDA fell 12.9% to €681m. Accrued capex was cut 33.4% to €251m, which is the only reason operating free cash flow rose 6.3% to €430m. After €374m of interest, €8m of tax and €224m of working capital and other items, free cash flow for the quarter was minus €160m.

SFR ended June with 19.1m mobile and 5.9m fixed customers, 92% of them on fibre. It lost 84,000 postpaid mobile customers in the quarter (another 77,000 prepaid on top) and 23,000 fixed.

Net leverage was 5.9x on an LTM basis and 6.3x on the last two quarters annualised. Liquidity was €0.43bn, of which €0.38bn was cash, and the RCF is fully drawn. Our read: with capex down a third and cash flow negative after interest, the company is running on a thin cushion until a closing that is still about a year away. The buyers' price adjustments are tied to how SFR performs until then.

Altice France reinstated capital structure

Drahi’s warrants are out of the money (for now)

€20.35bn EV less €15.87bn of consolidated net debt leaves about €4.5bn, before closing adjustments, fees and costs, and before counting the businesses Altice keeps. On those numbers, the sale alone would not get the equity near the €12bn strike on Drahi's lowest warrant tranche. The 45% creditor stake and the AF Lux 3 notes sit closest to that residual. How much of it actually reaches them depends on the change of control and asset sale terms in the new debt.

The distinction matters because of how the 2025 documentation is written. Under the new term loan credit agreement dated 1 October 2025, a disposal triggers change of control protections only if it transfers substantially all of the assets of the restricted group, and there is no bright line test for what that means. SFR accounts for roughly 76 to 82 percent of implied group enterprise value across the scenarios run during the restructuring, with XpFibre and the other retained businesses the remaining 21 to 24 percent, so the classification is not obvious. If the sale is instead an asset sale, the agreement requires proceeds to pay down debt, with a 100 percent sweep of cash in excess of €1bn on an 18-month forward liquidity basis payable to senior secured creditors.

Where it trades: as of 12 October, new Altice France senior secured bonds traded up to the high 90s after the revised consortium bid was announced, but have since traded into the mid-90s on average as the market seems to be growing impatient (or perhaps skeptical?) of the prolonged M&A timeline. Similarly, the reinstated AF Lux 3 2033 subs (now known as the SFRFP 10% 2033s) traded as high as a ~99c context before selling off and are now quoted in the 81.5 to 82c area. AF Luxco 3 equity now trades in the €12c/share context (also well off the €19.5c/share context highs). The math from here: at a mid-95 handle the €15bn of new secured bonds are worth about €14.2bn, and the reinstated 10% subs at about 82c imply a yield to maturity in the mid-teens on paper that once traded near par. Set that against the headline: the €20.35bn enterprise value leaves about €4.5bn of equity before closing adjustments, fees and costs, while the warrant strikes at €12bn, €14bn and €16bn of equity value imply enterprise values of roughly €28bn, €30bn and €32bn. An exit has to clear an enterprise value around €28bn before the lowest tranche is in the money. Altice France has no listed equity, so there is no Google Finance or Yahoo price for it.

What we are watching next

Definitive documents: the buyers were expected to sign in the second half of 2026. We have not seen a signing announcement as of 12 October.
Employees: UNSA, CFDT and CFTC called a strike on 24 September 2026, saying the job guarantees are not enough. Reported plans have Bouygues taking about 2,400 SFR Business staff, Orange about 230 and Free 53.
Competition: Orange and Bouygues started pre-notification with the Autorité de la concurrence on 30 June 2026. On 15 July the European Commission referred the Iliad leg to the Autorité at Iliad's request, so the French authority reviews all three. This takes France from four mobile operators to three.
Closing: targeted for the second half of 2027, and the buyers say there is no certainty it completes.
The debt: maturities run 2028 to 2033. What the secured notes, TLBs and AF Lux 3 notes receive at closing, and when, is the question for the credit.

† Optimum: a separate entity, not the subject of this piece.