APEN announced that it has agreed to a restructuring in conjunction with its receipt of $225 million in new financing from Fortress Credit Corp. and a Swiss bank.
In a press release dated October 27, 2009, APEN, Ltd. (“APEN”) (SIX Swiss Exchange: APEN), a publicly traded private equity firm, announced that it has agreed to a restructuring in conjunction with its receipt of $225 million in new financing from Fortress Credit Corp (“FCC”), an affiliate of Fortress Investment Group LLC, and a Swiss bank. Under the terms of the transaction, FCC provided APEN’s Bermuda subsidiary, APEN Bermuda, with a $200 million credit facility with a five-year commitment period and a final maturity in 2016, $100 million of which was drawn at closing while the remaining $100 million is available to be drawn, if required, during the commitment period. The Swiss bank provided APEN with a $25 million revolving credit facility with a one-year term that was fully drawn at closing.
In connection with the transaction, APEN has created a direct subsidiary, APEN Holdings LLC (“APEN Holdings”), to which it has contributed substantially all of the shares it held of APEN Bermuda. Once APEN repays the credit facility from FCC, APEN Holdings will make distributions from available cash flows as follows: (i) from 10% to 25% cash flows (depending whether (a) additional amounts are drawn under the credit facility from FCC and (b) whether any amounts are outstanding 30 months from the completion of the transaction) to affiliates of Fortress, (ii) 85% of the remaining cash flows to the holder of the preference shares issued by APEN Bermuda until such amount and simple interest of 5.25% on $150 million has been repaid to such holder, and (iii) the remainder to APEN and a wholly-owned subsidiary of APEN.
At the transaction’s closing, APEN repaid all of its previously outstanding debt of $79 million to the bank lenders. After payment of all transaction expenses, APEN and its subsidiaries will have approximately $35 million in cash and $100 million of available undrawn credit under the FCC credit facility.
Simultaneously with the transaction, APEN Bermuda has agreed to terminate its Investment Management Agreement with AIG Private Equity Management (Bermuda) Ltd. This termination includes a settlement of all of APEN Bermuda’s liabilities under the Investment Management Agreement.
To view the press release, please click here.