LONDON (Reuters) – Lenders to UK engineering firm Firth Rixson have agreed a loan waiver which will reset loan covenants and see sponsor Oak Hill put 100 million pounds of new equity into the deal, two bankers said on Thursday.
The majority of the equity injection will be used to repay part of the company’s 450 million pound ($741.7 million) senior leveraged loan at face value, while some will be used to back the company’s capital expenditure, one of the bankers said.
In return for agreeing to the waiver, lenders will receive a interest margin increase of 150 basis points (bps) across the senior debt and a 100 bps consent fee, the banker added.
Firth Rixson was bought out by Oak Hill in 2007 backed with 625 million pounds in loans arranged by GE Commercial Finance, Lehman Brothers and Lloyds TSB.
The financing was split into 450 million pounds of senior debt and a 175 million pound mezzanine facility.
(Reporting by Alasdair Reilly; Editing by David Cowell)