Warburg Pincus, a global private equity firm, is to invest AUS$65m ($53m) in troubled environmentally conscious waste management services company Transpacific as part of a recapitalisation.
Warburg Pincus, through its affiliate WP Holdings, will receive an 18 per cent stake in return for the investment.
The move is part of Transpacific’s plan to raise AUS$800m ($651m). The remaining AUS$735m will be raised at an entitlement price of AUS$1.20 per share.
The entitlement offer will provide all existing Transpacific shareholders with the opportunity to participate in the recapitalisation. The remaining AUS$735m purchased by shareholders will be raised at an entitlement price of AUS$1.20 per share.
Under the terms of the deal, Warburg will subscribe for shares at a price of AUS$1.80 per share – a 50 per cent premium to the entitlement price.
Warburg has also committed to contribute up to 62 per cent of the AUS$800m to be raised by Transpacific.
The proceeds of the equity raising will be used to retire debt and terminate certain ”out-of-the-money” interest rate swaps. It is also hoped that the recapitalisation will reduce pro-forma gearing to approximately 42 per cent compared to Transpacific’s gearing of 60 per cent as at the end of last year.
Warburg was one of the buy-out firms, as well as Bain Capital and Hellman & Friedman, that competed against Charterhouse to acquire energy research and consultancy firm Wood Mackenzie from its struggling private equity owner Candover.
Charterhouse is currently in talks to take Wood MacKenzie.
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