Cognetas in portfolio debt refinancing talks

The Electra Investment spin-out is feeling the effects of the credit crunch as it talks with banks about restructuring two of its European portfolio companies.

European mid-market private equity firm Cognetas is in debt refinancing talks with lenders for two of its portfolio companies: UK-based plastic surgery firm Covenant Healthcare and French glass packaging company SGD.

Covenant Healthcare, which breached its banking covenants more than 18 months ago, was acquired in a £170 million (€246million;$314 million) secondary management buyout from Phoenix Private Equity in 2004. Saint-Gobain Desjonquères, later renamed SGD, was acquired by Cognetas in a €670 million joint deal with French private equity fund Sagard in March 2007.

Talks with lenders were also underway for two additional Cognetas portfolio companies, according to the Financial Times. However, a source said that the firms in question, French printer CPI and UK bar operator Novus Leisure, have not breached their covenants and are not being restructured.

“The firm is in fire-fighting mode with a number of its portfolio companies at the moment,” Cognetas managing partner, Nigel McConnel, told press last month.

In December, Cognetas made six of its 50 staff members redundant, and was plagued by a series high level staff changes in 2008.

Cognetas declined to comment on the reports and Covenant Healthcare and SGD were not available for comment at press time.