Candover secures €52m refinancing from 17Capital

Alice Murray
23 July 2015

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Candover Investments has refinanced its existing debt with a new тЌ52m facility provided by 17Capital.

The company had previously issued $83.9m (£53.1m) in US private placement notes, which were set to mature at the end of this year. Following the refinancing, Candover's net debt position stands at £32.3m, with its outstanding US private placement notes standing at £20.8m.

The deal comes after a review of funding options for Candover, as the repayment of its debt was dependent on Arle Capital Partners successfully divesting its portfolio. As Arle has not delivered the necessary cash inflows, Candover has secured a new five-year loan facility with 17Capital for up to €52m (£37.1m). The new facility will allow Candover to repay its existing US placement notes at par as well as meet ongoing working capital requirements.

The new loan features payment-in-kind interest of 13% each year, which will be rolled up and paid when the loan is repaid. The loan's minimum repayment is calculated on the basis that it will be outstanding for 2.75 years; however, this is reduced to 1.15 years for any amounts repaid in the first 12 months, up to a maximum of €19.4m.

Following the refinancing, Candover will be able to return £21.8m to shareholders (the equivalent of 100 pence per share), following the realisation of investments and ahead of any debt repayments. This return is subject to a pre-distribution test that the portfolio value is at least twice that of its debt.

Candover's portfolio, which is managed by Arle, comprises Expro International, which is valued at £41.8m but was originally acquired for £92.1m; Parques Reunidos, which is valued at £39.9m and was purchased for £31.8m; Technogym, which is valued at £17.1m and was initially bought for £29.2m; Stork, which is valued at £30.9m and was originally purchased for £45.6m; and Hilding Anders, which is valued at £5.3m but was acquired for £24.3m.

Candover had previously refinanced its 2007 US private placement notes in December 2013.

Candover was previously a mid-market private equity investor; however, in December 2010, shareholders approved a change in investment strategy whereby the firm's sole focus was to return cash to investors rather than undertake any new investments.