FINLAND - EQT offers EUR 70m for covenant breach of Sanitec

Linn
14 May 2008

Tweet
Facebook
LinkedIn
Google plus
Send to

According to press reports, EQT has asked the banks that supplied the debt for the acquisition of Finnish bathroom products group Sanitec, which was completed in 2005, to waive and amend the covenants on the EUR 1bn of debt.

EQT has offered to inject EUR 70m of new funds into the company to pay down EUR 51m of the tranche A loan and a restructuring facility called tranche D. The remaining debt will stay on the company’s balance sheet.

Accoring to the same report, Sanitec has struggled to perform in line with expectations since the buyout. Even though margins and EBITDA have grown over the past two years, management informed lenders on Tuesday May 12 that the company is likely to breach its first quarter covenants.

Bjørn Hoi Jensen, senior partner of EQT, said in a statement that EBITDA is expected to grow from EUR 156.7m in 2007 to EUR 167m in 2008. Hoi Jensen also said that the equity injection was a result of heavy investments in new production facilities and making add-ons.