Paris, July 18 - French pastis and Marie Brizard liqueur maker Belvedere said on Friday it was trying to reach an agreement with note holders after seeking protection from its creditors. The sprits group said it had broken its covenants on floating rate notes totalling 375 million euro ($594.3 million) after buying back its own shares.
The breach means that note holders are entitled to demand repayment but the company has only 130 million euros left in cash in its coffers.
"We are trying to reach an agreement with note holders," a Belvedere spokesman said.
Belvedere said safeguard procedures had started two days ago -- the equivalent of being placed in administration in Britain.
Trading in Belvedere shares was suspended on June 20 just before the company said it was working on solutions to correct a potential breach of covenants in its senior secured debt.
The shares started trading in 2006, during which they reached a high of nearly 200 euros. They last traded at 56.01 euros.
Belvedere, which owns Berger pastis, Danish vodka Danzka and William Peel whisky, said trading in its shares should resume by Aug. 8.
It said it was still working on other options that included a sale of non-strategic assets and the refinancing of its debt but the process was made difficult by the current dire state of the financial markets.
Belvedere's 2013 floating rate notes (FRNs) dropped to be bid at 27 percent of face value on Friday from 51 percent percent on Thursday, traders said.
Advisory firm Lazard is acting for noteholders, who had a meeting last week, a person familiar with the situation said.