Bankers prep 1 billion euros debt for Scandlines deal

LONDON Thu Apr 11, 2013 11:17am EDT

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LONDON (Reuters) - Bankers are preparing debt packages of just under 1 billion euros ($1.3 billion) for the possible sale of ferry group Scandlines SCNDL.UL by 3i (III.L) and Allianz Capital Partners (ALVG.DE), banking sources said.

ACP 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 (APO.N), Axa Private Equity (AXAF.PA) 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 for 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 hope the sale goes through following a dearth of European merger activity this year. Leveraged buyout loans fell by 47 percent to $3.6 billion in the first quarter from the same period last year, TRLPC data shows.

Scandlines posted a 6 percent gain in recurring EBITDA (earnings before interest, tax, depreciation and amortization) to 193 million euros in 2012, compared with 2011, according to its latest results.

It reduced debt by around 140 million euros in the year, which contributed to a rise in net profit to 76 million euros from 10 million. Scandlines' net debt stood at 783 million euros at the end of 2012 from 922 million euros a year earlier.

Scandlines, established in 1998, carries passengers and freight between Denmark, Germany and Sweden. In 2012, it carried 11.7 million passengers, 2.7 million cars and 0.8 million cargo units, according to its statement on Monday.

An undersea road and rail tunnel being planned for 2020 between Denmark and Germany could reduce passenger numbers on one of Scandlines' busiest routes. ($1 = 0.7642 euros)

(Editing by David Cowell)

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