AXA, Cube replace head of embattled portfolio company

Joel Seche (pictured), owner of SAUR’s second-largest shareholder, has been replaced as president of the utility. Seche had wanted to take over the company, but faced stern opposition from its other shareholders, including AXA Private Equity and Cube Infrastructure.

A page has turned in the battle for control of France’s third-largest water company, SAUR, as a majority of shareholders voted to replace president Joel Seche.

Seche, the head of Seche Environnement, SAUR’s second-largest shareholder, had wanted to take over the utility against stern opposition from the company’s other shareholders – AXA Private Equity (AXA PE), Cube Infrastructure and the Fonds Strategique d’Investissement (FSI), a fund affiliated to state-backed bank Caisse des Dépots et Consignations.

Michale Bleitrach, formerly the president of French transport group Keolis’ board of directors, will take over Seche at the head of SAUR. Bleitrach has previously worked for Elf Aquitaine and Suez groups and is currently president of the Public Transport Union. SAUR said he will “make his extensive experience in local government services available to the Saur group”.

Seche’s takeover of SAUR was part of the original acquisition plan, when in 2007 AXA PE, FSI and Seche bought SAUR from private equity firm PAI Partners. At the time, Seche secured a call option to buy an extra 18 percent stake in SAUR from the FSI, the water company’s biggest shareholder with 38 percent of SAUR. Cube only joined the company in late 2008, via stake sales from AXA PE and the FSI.

But the crisis derailed Seche’s ability to pay for the call option at the price originally stipulated. In addition, any bid for majority control of SAUR would have triggered a clause in its debt covenants that could have paved the way for banks to demand an immediate refinancing of the circa €1.6 billion in debt that SAUR holds in its books – a move fiercely opposed by the other shareholders.

SAUR’s debt, most of it related to the 2007 acquisition, is priced at comparatively cheap 2007 levels, meaning an early refinancing could have raised the cost of servicing the debt significantly. The debt is scheduled to be refinanced in 2014.