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RLPC-Blackstone and N+1 seek payout with Mivisa debt deal
LONDON, March 12 |
LONDON, March 12 (Reuters) - The private equity owners of Spanish metal packaging firm Mivisa are seeking to pay themselves a dividend totalling 185 million euros ($240.77 million) just two years after buying the company, banking sources said on Tuesday.
Blackstone and N+1 Private Equity bought Mivisa in 2011 for $1.3 billion backed with 667.5 million euros of debt, according to Thomson Reuters LPC data. They now want to conduct a dividend recapitalisation - a process that sees more debt added to the existing borrowings and a dividend taken from it.
Dividend recapitalisations have been few and far between this year as bankers and loan investors worry about increasing a company's debt pile and taking money out of the business during difficult market conditions.
The only other dividend recapitalisation in Europe this year was for French aluminium manufacturer Constellium, and that was mainly conducted in the United States.
Blackstone and N+1 are looking to raise a new loan totalling 150 million euros that will be used to pay themselves a dividend alongside 35 million euros of cash from the company's balance sheet, banking sources said.
Blackstone and N+1 were not immediately available to comment.
The dividend will take Mivisa's leverage to 5 times its approximate 140 million euro EBITDA from a current level of around 3.8 times, bankers added.
Mivisa has performed well and its debt in Europe's secondary loan market has risen significantly this year. Its term loan B was quoted at 99.25 percent of face value on Monday compared to 96.25 percent of face value at the end of last year.
"Initial reactions to this deal were that the sponsors must be kidding as the company is Spanish and involved in the food industry. However, if you look a bit more closely, the company has performed well and produces a lot of cash," one of the bankers said.
"From thinking it was ludicrous to do this deal in the current market, the company actually has a good business case to pull it off."
Founded in 1972, Mivisa is the third largest European manufacturer of metal packaging for the food canning industry, according to its website. It has six factories in Spain and three abroad. ($1 = 0.7684 euros) (Reporting by Claire Ruckin; Editing by Mark Heinrich)
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