Debt-for-equity deal at Vita
THE PRIVATE equity owner of debt-ridden North West chemical firm British Vita has stepped up to provide around £60m of funding in a debt-for-equity swap, according to reports.
Texas Pacific Group, which led a £668m take private for the historic foam-maker in 2005, arranged the refinancing after Vita began to struggle to keep up with payments to service £630m debt because of a decline in some of the sectors it supplies, including automotive and home furnishings.
As well as TPG’s input, senior creditors including US banking giant JP Morgan, have extended a £35m credit facility.
The reports said the debt-for-equity deal involved senior creditors writing off 75% of their debt claims in return for a 32.5% stake in the business. Junior creditors, however, will end up with just a 2.5% stake for writing off nearly £200m in debt.
British Vita was formed in 1949 in Oldham with just £100 of investment and is now a worldwide group with thousands of staff.
Until TPG’s takeover the headquarters of the business remained in Middleton, but it is is now in Luxembourg.
In the North West the group employs more than 700 people with sites in Salford, Middleton, Preston, Accrington, Macclesfield, Dukinfield and Warrington.
