RLPC-Bankers prep 1 bln euros debt funding for Scandlines buyout

LONDON, April 11 Thu Apr 11, 2013 9:38am EDT

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LONDON, April 11 (Reuters) - Bankers are preparing debt packages of just under 1 billion euros ($1.3 billion) to help smooth the potential sale of ferry group Scandlines by 3i and Allianz Capital Partners, banking sources said.

ACO and 3i last year put up Scandlines for sale for up to 1.4 billion euros. At least three private equity houses have shown interest - Apollo, Axa Private Equity and Nordic Capital, a source said this month.

Goldman Sachs and ING, managers of the sale, are putting together a staple debt financing package of just under 1 billion euros for any possible buyers, the sources said on Thursday.

Staple financing arrangements speed acquisitions by giving would-be buyers confidence that financing is available.

Senior leveraged loans, mezzanine debt and high yield bonds are all being considered, the sources said. Other banks are working on rival debt packages for bidders.

3i and ACP paid 1.5 billion euros to buy Scandlines at the peak of the buyout boom in 2007, backed with 1.28 billion euros of debt, according to Thomson Reuters LPC data, alongside minority investor Deutsche Seereederei, which was bought out in 2010.

Bankers and debt investors are hoping the sale goes through following a dearth of European merger activity this year. Leveraged buyout loans fell by 47 percent to $3.6 billion during the first quarter from the same period last year, TRLPC data shows.

Scandlines' latest financial results, posted on Monday, showed recurring EBITDA (earnings before interest, tax, depreciation and amortisation) rose 6 percent to 193 million euros in 2012 from 2011.

It reduced debt by 141 million euros in the year, which contributed to a rise in net profit to 76 million euros from 10 million.

Scandlines, established in 1998, carries passengers and freight customers over three short-distance routes between Denmark, Germany and Sweden. In 2012, it transported 11.7 million passengers, 2.7 million cars and 0.8 million cargo units, according to its statement.

An undersea road and rail tunnel between Denmark and Germany across the Fehmarn Belt is being planned for 2020, however. If it goes ahead, it could reduce passenger numbers on one of Scandlines' busiest routes.

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