This article is from the Australian Property Journal archive
JAMES Packers' newly established investment firm Arctic Capital has come to the rescue of Living and Leisure Australia.
In a complex recapitalisation deal, Living and Leisure will undertake a renounceable Rights Offer to raise at least $90 million.
Arctic has agreed to underwrite the Rights Offer subject to a number of conditions including Arctic’s acquisition of the majority of LLA’s debt facility with the Octaviar Premium Income Fund and the support of LLA’s senior secured financier, the National Australia Bank.
LLA’s independent chair Julanne Shearer said the proposed recapitalisation would enable LLA to complete the key growth initiatives.
“Moreover, the proposed acquisition by Arctic of the majority of LLA’s debt facility with PIF and Arctic’s acquisition of the group’s responsible entity, provides a welcome introduction of a financial sponsor group with experience in LLA’s asset class as a substitute for Octaviar and its affiliated entities.
“Arctic’s international experience and pan Asian presence will be of considerable value to LLA in the execution of our international strategy,” she added.
LLA has entered into arrangements to realise its interest in the Northbank Place project joint venture with Far East Consortium for $9 million in order to fund current capital projects.
Arctic has also agreed to purchase $63 million of LLA’s unsecured debt from PIF and LLA will issue PIF in exchange for the remaining balance of its unsecured debt to LLA approximately $7 million plus capitalised interest.
Under the conditions, must provide satisfactory evidence to NAB that it has a signed credit approved offer for a lending facility or facilities sufficient to repay NAB’s debt in full by May 30.
And on June 6, Arctic has to satisfactorily complete its due diligence on LLA and NAB is satisfied with Arctic’s commitment to underwrite the Rights Offer.
Finally by June 13, LLA must repay NAB’s debt in full.
Shearer said whilst LLA will work to meet the milestones, no assurance is given that the milestones will be met.
If a milestone is not met, NAB’s forbearance will end. In those circumstances, it is possible that the recapitalisation will not proceed.
LLA owns ski fields at Mt Hotham and Falls Creek and the Melbourne Aquarium. The group also operates the Otway Fly’s Treetops business.
Australian Property Journal