Candover-backed Ferretti defaults on debt repayments

According to reports, Candover-backed yacht manufacturer Ferretti has defaulted on its debt repayments. It has appointed Rothschild to advise on talks with its banking syndicate, led by Royal Bank of Scotland and Mediobanca, in relation to potentially restructuring its EUR1bn+ debt.

The company is calling for an extension for the senior debt (EUR726m) and a debt-for-equity swap for the second lien debt (EUR120m), which could see the banks get a 33% stake in the company. A EUR100m capital injection by shareholders Candover (51%) and Norberto Ferretti (39%) would also be part of the recapitalisation deal. Significantly, Permira, which owns the balance, is not taking part in the process.

Ferretti, which specialises in luxury yachts costing on average EUR1.5m, has suffered sinking sales and an increase in cancellations. The move comes only a few months after Candover ditched a planned flotation of the company, owner of the Pershing, Riva and CRN brands, on the Milan stock exchange. Candover acquired its stake in Ferretti from Permira in late 2006, in a EUR1.7bn secondary buyout that saw the partial exit of Permira. The deal was said to have comprised of around EUR1.08bn in the form of senior debt and mezzanine facilities.

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