This article is from the Australian Property Journal archive
THE debt storm which hit Living and Leisure Australia has finally subsided after the company completed its recapitalisation proposal with James Packer's private equity company Artic Capital.
As part of the deal, Arctic Capital will buy Living and Leisure Australia Management Limited, the responsible entity of LLA from the Octaviar group, formerly MFS.
In addition, Packer has brought some friends with money onboard LLA in Morgan Stanley Strategic Finance Group and Goldman Sachs Asian Special Situations Group.
Under the recapitalisation deal, LLA will issue new stapled securities under the rights offer to raise $100 million. Under the rights offer will issue 105,123,557 new securities. The
Underwriter, Arctic LES (Ireland) Limited, together with Morgan Stanley and Triumph II
Investments (Ireland) Limited, an indirect wholly owned subsidiary of Goldman Sachs Group, have subscribed in aggregate for 2,394,876,443 new securities.
Following the rights offer, Arctic holds 49.3% of LLA’s issued securities, Morgan Stanley holds 19.9% and Triumph II Investments holds 19.4%.
The recapitalisation will see LLA refinance over $200 million of current debt including discharging its current senior secured facility with National Australia Bank and entering into new senior secured term and working capital facilities with the ANZ Bank.
The move will reduce gearing from over 50% to 30% and also restructure current unsecured debt owed to the Octaviar’s Premium Income Fund.
LLA’s independent chair Julanne Sheare said the recapitalisation has significantly reduced LLA’s gearing and places LLA in a position to pursue future growth.
Artic Capita’s chief executive Craig Carracher said the group were attracted to LLA because of its strong cash flow operating businesses.
“The strong platform of “edutainment” assets that LLA has aggregated and the potential growth across the developing Asian markets for education based entertainment assets.
“We look forward to working closely with management to further improve operational performance across the businesses, to support the execution of the Asian growth platform and to add value to the existing strong management team at each of the businesses,” he concluded.
LLA shares rose 1 cent to close at 4.1 cents.
Australian Property Journal