| LONDON, April 22
LONDON, April 22 Distressed debt investor
Centerbridge is looking at ways to refinance debt in struggling
German car parking business Apcoa once it completes an
imminent debt restructuring that will see it take control of the
company, banking sources said.
Centerbridge bought millions of euros of Apcoa's debt on
Europe's secondary loan market at the end of last year in a bid
to gain control of Europe's biggest parking management firm from
private equity house Eurazeo.
In March, a UK judge agreed to change the jurisdiction of
Apcoa's loan documents to the UK to enable an amend and extend
(A&E) on its 650 million euros ($897.26 million) of debt using a
scheme of arrangement, which only needs consent from 75 percent
By using an A&E, Apcoa can extend the upcoming April
maturities on its debt giving the company and lenders breathing
space to thrash out a full blown financial restructuring that
will involve a debt-for-equity swap.
Following that, Centerbridge is considering conducting a
refinancing of the restructured debt and is approaching lenders
about the idea, which is unusual because typically a company
that has been through a debt restructuring will wait for
performance to improve before carrying out a refinancing.
"Centerbridge will in effect become like a private equity
owner and selling the debt will be like taking a dividend," a
banking source said.
Centerbridge was not immediately available to comment.
A refinancing would face some major hurdles in attracting
support from the market given that lenders incurred deep
discounts when selling their Apcoa loan exposure to
A saving grace for the refinancing could be the lack of
deals in the market and the desire of cash-rich lender to
invest. The deal could also be made more attractive if the debt
and equity was stapled together, which would increase lender
returns if the company performs well, banking sources said.
"The issue with a lot of these credits is good companies but
bad debt structures. You have a lot of banks that automatically
shy away from deals where they lost money but more pragmatic
banks and investors will be able to assess the company afresh,"
a second banking source said.
Apcoa was bought by Eurazeo for 885 million euros in August
2007 from Bahrain's Investcorp at the peak of the buyout boom,
but has struggled to manage its debt burden in a weak growth
environment in Europe.
PWC, Linklaters and Clifford Chance are advising the company
on the financial restructuring, Lazard and Rothschild are
($1 = 0.7244 Euros)
(Editing by Christopher Mangham)