LONDON May 7 Banks are preparing syndicated
loans of around 300 million pounds ($509.77 million) to back a
potential sale of Britain's Co-operative Group's
pharmacy business, banking sources said on Wednesday.
Rothschild has been hired as adviser on the sale of the
pharmacy business, which is at an early stage and is part of a
wider restructuring of the member-owned group, the banking
The Co-op, a well-known high street presence with banks,
supermarkets and funeral homes, said earlier this year that it
was looking to shed non-core assets such as its 15 farms and 750
pharmacies to shore up its finances and revitalise the group.
"We are currently exploring the options for the future of
our pharmacy business, which could lead to its sale. There has
been significant early expressions of interest from potential
buyers," a Co-op spokesperson said.
Presentations are taking place to banks so they can work out
how much debt could be provided to potential buyers.
Bankers are preparing around 270-300 million pounds of debt
financing to back a sale of the pharmacy unit or around 4.5-5
times the unit's approximate 60 million pounds earnings before
interest, taxes, depreciation and amortisation (EBITDA).
Debt is likely to be in the form of senior leveraged loans
and could include subordinated loans such as mezzanine or second
Britain's Co-operative Group made a loss of 2.5 billion
pounds in 2013, capping the worst 12 months in the mutual's
150-year history after being hit by a 1.5 billion pound capital
shortfall at its bank, a drugs scandal involving ex-chairman
Methodist minister Paul Flowers, and an exodus of top
executives. [ID: nL6N0N91WL]
($1 = 0.5885 British Pounds)
(Editing by Christopher Mangham)