News

Polestar Group has revealed details of a refinancing and restructuring deal that will wipe £557m off its outstanding debt.

The recapitalisation is likely to cut the company's debt from £814m to £257m. Polestar chief executive Barry Hibbert said: "The completion of the restructuring has greatly strengthened Polestar. The recapitalisation provides the business with a stable platform that will allow it to focus on the opportunities in the market place."

The announcement came following reports in the Financial Times that Polestar's investors were on the verge of losing £700m in what it described as "one of the worst failures of a European leveraged buyout deal in recent years".

Polestar confirmed that the recapitalisation and restructuring of the business, which is due to complete on 12 December, would lead to a 67% reduction in the total amount owed under its existing Term A, Term B and Revolving Credit Facilities.

This transaction, agreed by the firm's senior secured lenders, will form part of a debt-for-equity swap that will result in former owner Investcorp losing its entire equity interest in the group. The senior secured lenders will instead own 100% of the equity in Polestar.

According to the Financial Times' report, Investcorp has also forfeited the £250m thought to be owed to it by Polestar. As part of the deal, Polestar will cease to be the sponsor of its pension scheme, which will now be administered by newly formed company Print Pensions Limited (PPL).

While Polestar will have no ownership links with PPL, which will be wholly owned by the trustees, the company has agreed to make cash contributions to the scheme totalling £45m over the next 12 years. In its last reported accounts, Polestar listed its pension deficit as £141.7m.

For more, see next week's PrintWeek.