3i to secure second dividend recap for Dutch retailer

The London-listed group will take out a €186m dividend from discount retailer Action

3i Group is planning to refinance Dutch discount retailer Action for the second time since it acquired the business.

The London-listed group is currently arranging a refinancing of €840 million, which is made up of a €780 million term loan and a €60 million revolving credit facility, according to a source familiar with the matter.

The capital will be used to refinance approximately €560 million of existing loans, repay €98 million of shareholder loans and pay an €186 million dividend, which will be distributed to 3i shareholders as well as funds managed by 3i, it is understood.

BNP Paribas, Deutsche Bank, Natixis, Rabobank and ABN Amro are leading the deal, the source added.

3i declined to comment.

This will be the second time 3i has refinanced Action. In September 2013, the group secured a €275 million refinancing for the business. The debt was used to refinance a more expensive vendor loan note in full, partially repay shareholder loans and finance a dividend to shareholders, 3i said at the time. The group received total cash distribution of approximately £58 million from this transaction.

Action has been owned by 3i since June 2011, when the firm acquired a majority stake in the business. The business, which was founded in 1993, is a large non-food discount retailer with shops in the Netherlands, Belgium and a growing presence in Germany and France. The company sells a selection of branded and non-branded product categories, including DIY, personal care, household and textiles.

3i’s realisations and refinancing proceeds were £324 million in the (€410 million, $510 million) six months up to 30 September 2014, the group said in its half year results earlier this month.

The refinancing comes after 3i made a number of acquisitions in recent months. Earlier this month, 3i acquired a majority stake in Ohio-headquartered Q Holding, a manufacturer of moulded rubber and silicone components, for $160 million, while in October, the group agreed to buy a majority stake in CHRIST, a German jewellery company that was previously part of Advent International-owned Douglas Holdings for approximately €214 million.

On Friday at 10.42 GMT, 3i shares were 447.50 pence, down 0.27 percent, giving the group a market capitalisation of £4,255.30 million.