Tue 01/05/2021 12:41 PM
Share this article:
Relevant Document:
2019 CVA Proposal

Majority lender Permira Debt Managers is considering a merger and acquisition of U.K. stationery retailer Paperchase in a debt-for-equity swap, as owner Primary Capital seeks to exit the situation, sources close to the situation told Reorg. Continue reading for the EMEA Middle Market by Reorg team's update on Permira Debt Manager's potential merger and acquisition of Paperchase, and request a trial for coverage of stressed, distressed and high-yield credits in the region. 

Paperchase issued an intention to appoint administrators this morning and advisors PwC will run an accelerated sales process aimed at securing a rescue buyer through a pre-pack administration deal, as reported.

Last year, KPMG attempted a sale for the group but received no offers of the level required to repay the group’s secured creditors. At the time, as a result of the failed sale and as a condition for Permira’s further financial support for the group, Primary Capital and Permira have executed a call option agreement whereby, upon exercise of the option for a nominal sum at any time, Permira (or its nominee) will become the new owner of the group.

As part of the company’s 2019 voluntary arrangement, or CVA process, Permira agreed to provide £16 million of additional funding to support the retailer’s turnaround strategy. A total £11 million of the debt was used to replace facilities provided by Lloyds and Bank of Scotland and £2 million repaid outstanding balances. Permira subsequently provided a further £5 million to support store investments.

As part of the 2019 CVA, the nominees estimated a return to the category 5 landlords and category 6 of 1.3 pence to the pound in a pre-pack administration scenario, as shown below:

A summary of the 2019 CVA terms is below:

-- Lara Gibson, Connor Lovell
Share this article:
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2021 Reorg Research, Inc. All rights reserved.
Thank you for signing up
for Reorg on the Record!