Dive Summary:
- Hoping to avoid a massive financial writedown, Biffa's institutional lenders are expected to reject an $814 million offer.
- If accepted, the £520m offer would wipe out mezzanine debt holders investors and would significantly reduce value of senior debt holders. Any change of ownership would require a unanimous agreement from all debt holders.
- See previous coverage of the US based consortium's bid
From the article
Institutional lenders to UK waste management firm Biffa are expected to reject a 520 million-pound ($814 million) offer for the company in a bid to avoid a huge writedown on its 1.1 billion pounds of loans, banking sources said on Wednesday.
Biffa's private equity owners Montagu Private Equity and Global Infrastructure Partners (GIP) bought the company in 2008 backed by 1.1 billion pounds of senior and mezzanine loans and they unsuccessfully tried to sell the business or parts of it earlier this year.
With no sale agreed, a debt for equity swap restructuring looked the most likely outcome and started to take shape, until the 520 million-pound offer for the company was made this month by a consortium made up of waste treatment specialist Chinook Urban Mining, buyout house Clearbrook Capital and JP Morgan, banking sources said.
