Yucaipa, a Los Angeles-based private equity house, has agreed to take over Icelandic shipping group Eimskip’s €120m secured credit facility from Dutch lender ABN Amro, as part of a major restructure, according to the Financial Times.
Eimskip, Iceland’s oldest publicly listed company, is being taken over by its 57 unsecured creditors, who have all agreed to swap the credit they extended for equity in the business. It is said that the move will cut Eimskip’s debt from €1.6bn to €100m.
A key component of the restructure is Yucaipa’s decision to take on the €120m loan, after ABN Amro stalled negotiations by refusing to accept a writedown on its loan.
According to the FT, Yucaipa will swap part of the loan for a 49 per cent stake in Versacold Atlas, a Canada-based chilled food storage and distribution company bought by Eimskip for $525m in 2007 as part of a poorly timed acquisition spree shortly before the downturn took a hold.
The private equity firm plans to merge Versacold with its rival frozen food storage portfolio company Americold, and has the option to acquire the remaining 51 per cent of Versacold.
The FT reports that Yucaipa would become Eimskip’s second biggest shareholder after agreeing to swap part of its loans for a 32 per cent stake. Shareholders in the shipping company would be wiped out.
Iceland suffered a severe banking crisis in 2008 in which the state had to nationalise its largest lenders. This restructure is reportedly the country’s largest outside of the financial sector.
According to a statement released by Eimskip, “At this turning point it is important for the Icelandic economy to get its momentum back and get its wheels turning at full speed. By achieving this milestone Eimskip is setting the precedent for the reconstruction of Icelandic companies for the benefit of the nation.”
Copyright © 2009 AltAssets