Doughty Hanson, a European buyout firm, has rescued its investment in 20:20 Mobile Group, a UK mobile phone distributor, by handing the banks behind the buyout half its equity stake and making a fresh capital injection of £15 million.
The company said the financial restructuring, which includes a reduction in bank debt by the consortium led by RBS, provides the company with a stable financial platform for future growth. Its net debt is now £92 million.
A source close to the firm said the restructuring would probably have a negative impact on the overall return for Doughty’s fund IV, but while 20:20 was still a going concern, there was a chance the investment could at least break even or better.
Doughty Hanson retains a 45 percent in the business, while management, led by chief executive Meinie Oldersma and chief financial officer Nick Smith, holds 10 percent.
Oldersma said in a statement: “This successful outcome is a mark of confidence from our investors in the new management team’s resolve and ability to reboot this company and move us forward into an exciting new future. The new financial structure will enable us to develop the long-term strategic alliances with customers and suppliers that will see us deliver genuine value-added services.”
The new board will comprise two representatives each from Doughty Hanson, the banking consortium and management.