Bloomberg News

KKR, Permira Seek to Amend Loans to Cut ProSiebenSat.1 Stake

June 16, 2011

(Updates with loan maturity in third paragraph.)

June 16 (Bloomberg) -- KKR & Co. and Permira Advisers LLP are seeking to amend terms of loans to allow them to cut their stake in ProSiebenSat.1 Media AG without triggering a debt repayment, according to two people with knowledge of the matter.

The two private-equity firms, which own 53 percent of ProSiebenSat.1 through investment vehicle Lavena Holding, asked lenders for permission to reduce their holding of voting shares to as little as 35.1 percent before being required to repay debt used to buy the German broadcaster in 2007, said the people, who declined to be identified because the request is private.

KKR and Permira would need to raise about 2 billion euros ($2.8 billion) in an IPO to repay all of the debt, according to one of the people. The proposed amendment would allow them to sell just a portion of their stake and repay some of the loans, without breaching conditions that would trigger a full repayment. The loans to Lavena start coming due in 2015, according to data compiled by Bloomberg.

KKR and Permira currently hold 88 percent of voting rights. At present a so-called change-of-control clause would prompt a full debt repayment if their portion of voting share capital fell to 50 percent or below, the people said.

The private-equity firms also asked lenders to permit proceeds from asset sales to be used to cut ProSiebenSat.1’s operating company debt, according to the people. At the moment, these proceeds must be used for new acquisitions or stay as cash on the broadcaster’s balance sheet, the people said.

UniCredit SpA is coordinating the amendment, for which lenders are being offered a fee of 10 basis points, the people said. The deadline for approval is June 27.

Julian Geist, a spokesman for Unterfoerhring, Germany-based ProSiebenSat.1, a Permira spokesman in London and Christoph Kreileder, an external spokesman for New York-based KKR, all declined to comment.

A basis point is 0.01 percentage point. The news was reported previously by Standard & Poor’s LCD and Reuters.

--Editor: Cecile Gutscher, Chapin Wright

To contact the reporter on this story: Karen Eeuwens in London keeuwens@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.


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