| LONDON, April 15
LONDON, April 15 Bankers are working on a
refinancing of the 4 billion pound ($6.2 billion) debts of the
private equity-owned firm behind British motoring services firm
AA and travel company Saga, banking sources said on
The refinancing at the firm, called Acromas,
would be part of plans to possibly spin off the AA and Saga six
years after they were acquired, a move which coincided with the
financial crisis and which left banks unable to syndicate the
debt which financed the deal.
The quest for a refinancing reflects more positive credit
market conditions and is said to be attracting attention from a
number of banks eager to participate following a dearth of deals
Acromas is owned by private equity firms Charterhouse
, CVC and Permira and was formed in
2007 though the 6.2 billion pound merger of the AA and Saga.
The merger was funded with a 4.8 billion pound leveraged
loan, according to Thomson Reuters LPC data, which arrangers
Barclays and Mizuho were unable to syndicate
after the market collapsed.
Both banks were forced to hold the debt and the business has
performed well in the interim. Acromas's net bank and other
borrowings stood at 4.1 billion pounds in the 2011-2012
Ernst & Young was appointed last year to carry out
due diligence and explore valuations for the companies as two
Bankers said it was likely Saga would be floated on the
stock market and the AA would be sold in a leveraged buyout or
However, Acromas's debt needs to be refinanced before any
further action is taken, bankers said, as 1.75 billion pounds is
due to mature in 2015 and the rest by 2017.
As part of the refinancing, a large portion of the debt
could be put onto the AA, leaving Saga relatively light in debt
and in good shape for an initial public offering or IPO, bankers
AA's new financing structure would either look like a
traditional leveraged financing - made up in other words by term
loans and revolving credit facilities with maturities of up to
seven years - or would be structured more akin to an
infrastructure deal, with longer-dated debt.
The AA could also be retained instead of sold, bankers
Acromas director of communications Paul Green said: "We are
focusing on running the business well and there is no rush to do
anything," declining to comment further.