Barclays PE to reduce investment value in 2009

Barclays Private Equity is reportedly planning to reduce equity investments in 2009 to around EUR200m, compared with the EUR450m invested in 2008, according to its president Gonzague de Blignieres. The reason given is the unwillingness of banks to lend more than EUR100m, especially in light of the alarming increase in the number of portfolio companies breaking banking covenants.

In the case of Barclays PE, around 50% of companies are near breaching ratios resulting in a technical covenant breach although none of the companies are at risk since liquidity ratios are still good. Barclays PE will prioritise the financing of external expansion for current portfolio companies, however it doesn't not rule out a substantial buyout in 2009.

Barclays PE has recently taken control of Compin in an LBO deal which, at the time of going to press, is pending approval from authorities. Four banks provided EUR70m of debt for the transaction.

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