March 20, 2018 / 1:11 PM / a year ago

Banks prepare around 1 billion euros of debt for potential HSE24 sale

LONDON (LPC) - Bankers are working on debt financings of almost €1bn (£877.35 million) to back a potential sale of German home shopping TV network HSE24, banking sources said.

Buyout group Providence is moving ahead with plans to either sell or float HSE24 on the Frankfurt stock exchange before the summer.

Some €950m of debt financing represents around 6.25 times HSE24’s expected 2018 Ebitda of €140m, including undrawn facilities, the sources said.

At that leveraged level, senior leveraged loans and junior debt in the form of either second lien loans or high yield bonds will be considered, the sources said.

Other bankers are working on all-senior financings at 5.25 times, the sources said.

Providence declined to comment.

Suitors including private equity firms Advent, Apax, BC Partners, Cinven and PAI are expected to hand in tentative bids worth around €1.5bn before Easter, in the first round of an auction process.

HSE24 raised €265m of leveraged loans in 2012, to back Providence’s buyout. In 2016, it agreed an additional €171m loan to pay a dividend to shareholders. It repriced its original buyout loan in 2017 on more attractive terms, according to Thomson Reuters LPC data.

Editing by Alasadair Reilly

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