Loan Being Finalized for Kalle Nalo Buyout

LONDON (Reuters) – Silverfleet Capital, formerly PPM Ventures, is finalising debt financing to back its proposed acquisition of German sausage casing maker Kalle Nalo from Montagu Private Equity, banking sources said on Friday.

A group of seven or eight banks are currently working on the financing, three bankers said, adding that the loan was likely to be provided by a club of banks and total 100-150 million euros ($142 -$213 million).

Pamplona Capital has also shown interest in buying the company, sources have said.

Montagu had appointed Sal Oppenheimer to advise on the possible sale of Kalle and had discussed a possible club financing to back the deal with banks.

Progress on the sale has been slow, in line with other European auctions due to the scarcity of debt financing and private equity firms’ struggle to achieve target returns on debt-financed deals.

CVC Capital Partners sold Kalle Nalo to Montagu in 2004 for an undisclosed price, backed by a leveraged loan from Mizuho. The loan included 120 million euros of senior debt and 20 million euros of mezzanine debt.

Before it was acquired by CVC, Kalle was a subsidiary of Hoechst. Kalle produces artificial sausage casings out of viscose, plastic and textiles. The company also manufactures sponge cloths. (Reporting by Alasdair Reilly; Editing by Dan Lalor) ($1 = 0.7058 euro)

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