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Montagu, GIP-backed Biffa taken over by lenders in debt for equity swap

30 Nov 2012

Biffa, the ailing UK waste services business backed by Montagu Private Equity and Global Infrastructure Partners (GIP), has been taken over by its lenders after failing to find a buyer.

Senior lenders Angelo Gordon, Avenue Capital Group, Babson Capital Europe and Sankaty Advisors have agreed to swap their debt for equity and make a £75m cash injection.

The company said the cash will be used to fund a new infrastructure programme to bolster its position as the UK’s second-biggest waste management company by sales.

Biffa’s total debt will be reduced from more than £1.1bn to about £520m through the deal, which is expected to close early next year.

Company CEO Ian Wakelin said, “We are delighted to announce this important milestone towards the financial recapitalisation reaching a successful conclusion.

“The recapitalisation will provide the company with significant new investment, bring long-term financial stability to Biffa, and provide an excellent platform to move forward as we grow and develop the business further.”

Earlier this year Biffa received a £520m cash offer from a consortium of investors comprising Clearbrook Capital, JP Morgan recycling specialist Chinook Urban Mining, it is understood.

But the sole offer was not considered good enough by the company.

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