UK - EQT to inject £100m into SSP

Deborah
11 June 2009

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Swedish private equity fund EQT reportedly plans to inject £100m of fresh equity into portfolio company Select Service Partners (SSP), Britain's largest railway food and beverage concession operator, which includes brands such as Upper Crust, Mille's Cookies and Caffe Ritazza.

EQT is attempting to encourage lenders to ease the terms of its £1.2bn debt pile, reducing interest payments over the next year. In March, EQT injected £20m of capital into the company, but it is still in danger of breaching its banking covenants. SSP is facing a £30m interest payment on its debt in July.

As a result of falling commuter numbers and lower consumer spending, the company has struggled to make a profit. In the year to September 2008, operating profits fell drastically from £19.2m to £1.4m.

London-based SSP operates more than 1,800 catering and retail outlets at airports, train stations, motorway service stations and shopping centres in Europe, Asia and North America. In the UK and Ireland alone, it operates more than 610 outlets at 22 airports and 115 rail stations.

SSP was acquired by EQT from Compass Group in 2006 at the height of the boom for around £1.2bn. Mizhuo, Dresdner Kleinwort Wasserstein and Morgan Stanley provided a debt package that included senior, mezzanine and PIK notes.