Famar, a contract manufacturer to pharmaceutical industries, has completed a 174 million euro ($197 million) debt restructuring and secured new funds from private equity-backed Pillarstone to strengthen its capital position.
Pillarstone is a platform set up by private equity firm KKR and John Davison in 2015 to partner with European banks to create value by managing their on-balance sheet non-core assets.
Pillarstone’s Greek subsidiary has been licensed by the Bank of Greece to provide long-term capital to large corporate borrowers and manage banks’ sour loans.
“A new investment of about 58 million euros into Famar was committed by KKR via Pillarstone,” Pillarstone’s CEO John Davison told Reuters on Wednesday.
“All four Greek banks are supporting Pillarstone in the firm’s restructuring and the turning around of the business,” he said.
Under the restructuring deal, Famar’s 234 million euros pre-existing debt obligations will be reduced by 116 million, with maturities on all significant facilities extended by six years.
Pillarstone will underwrite a new senior facility of 58 million euros to fund Famar’s long-term development plan and working capital needs.
The Pillarstone platform serves as a specialist solution to support banks in managing their non-performing loan exposures. It invests long-term capital and provides management expertise to help the underlying businesses get back on their feet.
“Greek banks are retaining a partnership with us,” Davison said. Pillarstone will fully own Famar’s equity with Greek banks retaining a 39 percent economic intertest to benefit from upside potential, he said.
Earlier this year, Pillarstone agreed a similar deal with another large Greek corporate, retailer Notos Com Holdings, which operates a number of department stores representing international brands.
“In Greece Famar and Notos have been our primary focus,” Davison said. “We have done a huge amount of work in the last 18 months, bringing in a new management team and a new plan for Famar.”
Famar, established in 1949 and part of the Marinopoulos Group that fell apart, supplies a wide range of products to a broad customer base from production plants across Europe.
Greek banks – Piraeus (BOPr.AT), National (NBGr.AT), Eurobank (EURBr.AT) and Alpha (ACBr.AT) – remain focused on reducing their bad debt portfolios and meeting targets on so-called non-performing exposures agreed with European Central Bank regulators.