October 25, 2017 / 2:15 PM / a year ago

LPC-Banks line up €2.4bn Refresco loan as part of wider debt package

LONDON, Oct 25 (Reuters) - Banks have lined up €2.6bn of debt financing to back Refresco’s €1.6bn offer from a consortium led by French private equity firm PAI Partners, banking sources said on Wednesday.

The take-over financing is split between senior and junior debt, as well as undrawn tranches, the sources said.

BNP Paribas, Credit Suisse and JP Morgan are involved in the financing alongside a number of other banks, the sources added. The companies announced on Wednesday that banks have committed around €2.4bn of term debt.

PAI declined to comment on the financing details.

PAI and partner British Columbia Investment Management Corp aim to buy all 81.2m Refresco shares at €20 each, ending a short-lived listing on the Amsterdam stock exchange of less than three-years.

Refresco rejected PAI’s initial offer and afterwards agreed in July to buy the bottling activities of Canada-based Cott Corp for US$1.25bn, backed with a €2bn-equivalent leveraged loan financing.

That €2bn-equivalent leveraged loan financing was completed and allocated on September 27. JP Morgan led the deal with bookrunners ABN Amro, BNP Paribas and Rabobank. Commerzbank, HSBC, MUFG, Mizuho and Societe Generale also joined as mandated lead arrangers, according to Thomson Reuters LPC.

That loan does not have portability and not all the banks involved in it will be involved in the new financing backing PAI’s buyout, the sources said.

There will be some attempt made to enable investors in the existing loan to roll over into the new one, but given that leverage levels will be considerably higher, not all investors will want to be involved in the new financing, the sources said.

The PAI consortium’s bid already has the support of shareholders representing 26.5% of Refresco shares and is expected to close in the first quarter of 2018.

Refresco was founded in 1999 and floated in March 2015 by its owners including private equity firm 3i at €14.50 per share. It makes and bottles fruit juices and soft drinks for retailers and brands in Europe and the United States.

The company employs 5,500 people and has production sites in the Benelux countries, Finland, France, Germany, Italy, Poland, Britain and the US. In 2016, it reported a net profit of €81.5m on revenue of €2.1bn. (Editing by Christopher Mangham)

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