LONDON Aug 20 McCarthy & Stone announced on
Tuesday it has completed the restructuring of 518.9 million
pounds ($813.55 million) of debt, reducing the debt burden of
the UK retirement home developer by 350 million pounds.
As part of the transaction, a group of 24 institutional
investors in the company have injected 367 million pounds into
the business and refinanced a further 160 million pounds with a
new five-year term loan facility.
A core group of these investors comprising Goldman Sachs,
Anchorage, TPG and Alchemy Partners now own over 50 percent of
"The cash injection is basically a rights issue to pay down
debt," said one source close to the negotiations. "A significant
amount of McCarthy & Stone's debt has traded out of the hands of
legacy lenders in the last couple of months and left this final
group of 24 investors including distressed funds such as
McCarthy & Stone said the 527 million pounds raised will be
used to pay down its outstanding debt, which comprises 510.3
million pounds in loans and an 8.6 million pound swap, as well
as any further transaction costs.
McCarthy & Stone CEO Mark Elliott said the loans have been
paid nine months ahead of schedule and that the business will
now focus on growth plans which include 1.5 billion pounds of
investment over the next four years.
In November last year McCarthy & Stone appointed financial
advisor Moelis & Company to conduct a strategic review of the
business, which has been owned by its lenders following a 2009
debt for equity swap.
According to Thomson Reuters LPC, that deal resulted in 200
million pounds of mezzanine loans being wiped out, leaving
around 500 million pounds of senior debt in place. The
restructuring was a result of the homebuilder being unable to
service its debt after the housing market slump meant fewer
elderly people were able to sell their properties to move into
The business was saddled with unmanageable debt following a
1.1 billion pound take private in 2006 by a consortium led by
Halifax Bank of Scotland.
($1 = 0.6378 British pounds)
(Editing by Christopher Mangham)