(Bloomberg) -- Altice France contributed a majority stake in French fiber unit XpFibre to an unrestricted subsidiary, adding to creditors’ concerns about how the company’s plans to cut debt will hurt their investments.

The heavily indebted French telecommunications firm contributed its 50.1% stake in XpFibre and some of its receivables to an unrestricted company on May 22, Altice France said in a statement on Tuesday.

Altice France is looking to sell that stake, and moving it to a company that is not subject to some debt covenants allows the parent firm to either raise new money in ways that may hurt existing creditors, or to use it as part of the negotiations with debt holders to cut leverage. 

“While XpFibre itself was already well understood to be an unrestricted subsidiary, shifting the Altice France’s shares in XpFibre to a Holdco designated as unrestricted at both the Altice France and Altice France Holding level, represents a further step to distance this key asset from creditors,” said Mark Chapman, a senior analyst at CreditSights.

Read More: Ardian Said to Join Bidding for Altice’s €7 Billion XpFibre Unit

Telecom tycoon Patrick Drahi’s Altice previously disclosed it designated a series of subsidiaries as “unrestricted,” Bloomberg News reported earlier this month. It didn’t say what assets received the designation at the time. 

The stake in XpFibre was moved to the unrestricted company after it repaid a €223 million ($242 million) shareholder loan on May 14, Altice France said Tuesday. 

Altice France is racing against the clock to reduce its increasingly unsustainable debt pile while facing a probe into allegations of corruption at the wider Altice conglomerate. 

In March, it told creditors they would need to take a hit to help it achieve a new leverage target. The company is looking to reduce its leverage to below 4-times earnings before interest, taxes, depreciation and amortization. Consolidated net debt was €24.2 billion at the end of last quarter, with net leverage more than 6 times Ebitda, according to the statement.  

Management declined to take questions during an earnings call on Tuesday, citing the number of queries received. Altice France said it will communicate to the market when it has an update.

European private equity firm Ardian was considering an offer that could value XpFibre at around €6 billion to €7 billion including debt, Bloomberg reported in April. The fiber company had about €2.5 billion of net debt, according to a September investor presentation.

Altice France had already agreed to sell its media and data center businesses, and moved those assets to unrestricted subsidiaries out of the reach of creditors. Management previously said that they would consider using those proceeds alongside the participation of creditors in “discounted transactions” to slash leverage. 

Creditors have organized into two groups, one with secured creditors advised by Rothschild & Co. and Gibson Dunn & Crutcher, and the other formed by holders of both secured and unsecured debt advised by Houlihan Lokey Inc. and Milbank LLP. 

Read more: Billionaire Drahi’s ‘Bully-Boy’ Moves Leave Creditors Flummoxed

Even some of the most senior creditors are trying to find a way out. Last week, Bloomberg News reported French lender Societe Generale SA failed to sell in an auction part of its exposure to Altice France’s revolving credit facility after the bids were lower than the 70 cents on the euro the bank was seeking. 

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