Dutch flower and plant business Dümmen Orange reported a negative EBITDA in April, sources told Reorg. The company’s trading has improved in May as Covid-19 pandemic restrictions in Europe have eased with garden centers and other retailers reopening, sources added.
The majority of the company’s par lenders including Alcentra have sold out, sources said. Triton, ICG and Brigade are still invested. Sponsor BC Partners has bought some of Dümmen’s term loan over the past months and holds in excess of 25% of it, sources said. The €425 million term loan is quoted in the high 30s at the moment, sources added.
The group’s €70 million RCF was drawn by about €60 million at the end of April and the company would have to repay part of this amount to be compliant with its springing net leverage covenant set at 7.3x when the facility is drawn more than 35%. Dümmen’s leverage exceeds 7.3x at the moment.
The company met its covenant at the end of March but would have to reduce its drawings to less than 35% of the RCF by the end of June to avoid the covenant being tested. Alternatively, Dümmen could ask its RCF lenders to waive the covenant or provide a covenant holiday.
In addition to the RCF, the group’s debt includes a €425 million term loan B due in 2024, which pays Euribor +350 basis points. The company originally raised €350 million in 2015 when BC Partners
took a majority stake in the business. Dümmen Orange subsequently launched a €75 million add-on in 2017 to fund acquisitions.
Reorg Debt Explained analyzed the group’s legal documentation at the time of the deal. For a copy of the full report click HERE.
-- Aurelia Seidlhofer, Mario Oliviero, Luca Rossi