Reuters: Buyout Firms Seek Up to $500 Mln Recap for China’s Focus Media-sources

(Reuters) – Focus Media Holding Ltd, a Chinese display advertising company backed by Carlyle Group and other private equity firms, plans to return to the loan market with a recapitalisation plan of up to $500 million, according to sources familiar with the matter.

As part of the deal, Focus will amend the terms of an existing loan that it completed shortly after Carlyle and four other buyers acquired the company in a record deal.

The recapitalisation will add more debt onto Focus Media and allow the company to pay a dividend to its shareholders, the sources say. Such a move is called a “dividend recap”.

The total size of the financing package, according to sources, is expected to be up to $500 million, though it is unclear how big the dividend will be.

The company’s new owners – which also include FountainVest Partners, CITIC Capital Partners, China Everbright and Fosun International Ltd – acquired Focus Media in May for $3.8 billion, in what is China’s biggest-ever leveraged buyout.

The buyout featured a $1.525 billion financing provided by a syndicate of 18 banks, according to Basis Point, a Thomson Reuters publication.

Carlyle and Fosun declined comment. Focus Media and the other companies were not immediately available for comment.