LONDON, Sept 17 Bankers are putting together up to 600 million euros ($801.15 million) of debt financing to back a sale of French construction company Materis' industrial mortars unit Parax, banking sources said on Tuesday.
French private equity firm Wendel acquired Materis in 2006 in a leveraged buyout and has been seeking to dispose of some assets in a bid to reduce Materis' 1.9 billion euro debt pile and ease pressure on the company. It also wants to reduce its overall exposure to construction.
It launched a sale process last month hiring BNP Paribas and Rothschild as advisers on the deal which has a price tag of around 1 billion euros and is expected to complete in the first half of 2014.
First round bids in an auction process are due around October 7, the bankers said.
Wendel was not immediately available to comment.
Bankers are preparing debt packages of between 4.5 times to 6 times Parax's approximate 99 million euro earnings before interest, taxes, depreciation and amortisation (EBITDA). A range of debt instruments are being considered including senior leveraged loans and subordinated debt such as high yield bonds, bankers added.
Materis' loans have risen on Europe's secondary loan market since the deal was announced and were quoted at 95.30 on Tuesday compared to 93.5 in mid-August, according to Thomson Reuters LPC data.
Last year, BNP Paribas and Rothschild were also handling the sale of Materis' aluminates supplier Kerneos but the process failed after bids fell short of an around 680 million euro price tag. ($1 = 0.7489 euros) (Editing by Christopher Mangham)