Findus Group Ltd., the frozen-food company owned by private-equity firm Lion Capital LLP, will be taken over by its junior lenders in a debt restructuring, according to four people with knowledge of the situation.
Lion Capital, which backs the debt-for-equity swap proposal, will retain a stake of about 30 percent in Findus, owner of the Young’s Seafood brand, said the people, who asked not to be identified because the talks are private.
Findus’s mezzanine lenders aim to complete the debt restructuring by the end of this month after getting approval from lenders holding more than 80 percent of the London-based company’s senior loans, exceeding the two-thirds required for the proposal to go through, the people said.
Under the plan led by Lion Capital, Highbridge Capital Management LLC and JPMorgan Chase & Co. (JPM:US), junior creditors will write off more than 200 million pounds ($310 million) of mezzanine loans in return for ownership, the people said. They will inject 220 million pounds into the company, including 125 million pounds to pay down senior debt at par, said the people.
Junior lenders would also provide 70 million pounds in a short-term credit facility to meet Findus’s working capital requirements, said the people.
“The mezzanine deal which is quickly deliverable, consensual and maximizes value for all creditors gives the company ample funds and the corporate stability that will allow the management to grow the business and the group to progress,” Matthew Smallwood, a Findus spokesman, said in an e-mail today. He declined to comment on details of the restructuring proposal.
Lion Capital bought Findus, formerly known as FoodVest, in July 2008 for 1 billion pounds from CapVest Ltd. in a leveraged buyout funded by 730 million pounds of loans, according to data compiled by Bloomberg.
Findus had received debt covenant waivers from creditors since March in anticipation of breaching loan terms.
Shona Prendergast, a spokeswoman for Lion Capital, declined to comment.
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