Apax set to lose stake in Panrico

Julian Longhurst
02 July 2010

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The large banking syndicate holding debt in the Spanish bakery business Panrico looks likely to follow through with a debt for equity swap after attempts to re-finance the leverage package failed.

The syndicate, comprising as many as 100 institutions, is currently finalising the exact details of the swap, though it is believed that Apax will lose the majority of its holding in the business. The latest company filings for Panrico showed that it held over €550m of debt on its books in 2008.

Apax backed the €900m buyout of Panrico in August 2005. The transaction was financed with a €650m debt and mezzanine package underwritten by Goldman Sachs, ING, Caja Madrid, Royal Bank of Scotland and La Caixa. Approximately €600m of the package corresponded to acquisition finance, with the remainder earmarked for working capital.

Founded in 1961, Panrico is one of the largest Iberian bakery companies, focusing mainly on the pastries and sliced bread categories. Its brands include Donuts, Panrico, Bollycao and Donettes.

Throughout the negotiations the company has been keen to stress that day-to-day operations will not be effected by the changing shareholder base and that current management team, led by César Bardají, will remain in place.