Schefenacker migration and restructuring
Bondholders may not find 5% of the equity an appealing prospect, but the level of pain to be borne by Schefenacker's existing shareholders is yet to emerge.
The company has announced replacement of €250m 1st and 2nd lien debt and €200m of subordinated bonds with new debt of €305m:
- €25m senior revolving credit
- €170m senior term loan
- €110m mezzanine
Some of the €55m "new money" is said to come from a mezzanine investment from the group's owner, Dr Alfred Schefenacker, who is also transferring minority interests in Schefenacker Engelmann Spiegel GmbH to the group. His shareholding in the group is to be reallocated in part to the senior lenders.
The value of his financial contributions and the extent of his the equity dilution may be enough to make the deal work. The company says it doesn't need bondholder approval, but neither has it yet announced the detail of the restructuring mechanism. . . .
[...] Speculation (see earlier post) that the original proposals, published on 9 February, did not offer enough for bondholders proved correct. [...]