EQT portfolio company defaults

Bathroom-maker Sanitec is renegotiating debts with lenders; its sponsor EQT has offered to inject €100m of equity into the business in return for a €500m reduction in its debt burden. The restructuring of Sanitec is the first visible instance of EQT suffering from the global financial crisis.

EQT Partners’ portfolio company Sanitec has begun renegotiating its financial structure with lenders following a default on loan repayments.

Sanitec: talking to lenders

The mid-market Nordic buyout firm has offered to inject a further €100 million of equity into Sanitec, a designer and manufacturer of bathrooms, provided the company’s lenders reduce its debt from €850 million to €350 million, according to a source close to the situation.

“Sanitec is a profitable company with EBITDA of more than €100 million in 2008 and a strong cash position, but the current financing structure has to be changed as a result of the harsh economic climate,” a spokesman for EQT said.

EQT acquired Sanitec in February 2005 on behalf of EQT IV Fund from UK-headquartered private equity firm BC Partners.

The restructuring of Sanitec is the first visible instance of EQT suffering from the global financial crisis.

The firm had a productive 2008, making several investments – most recently the €269 billion acquisition of Danish IT business KMD – and achieving the successful exit of German Hoist company Pfaff Beteiligungs for €36 million.

As well as closing its debut infrastructure fund ahead of its €1 billion target in November, the firm also made two high profile hires. It hired ex-partner at IK Investment Partners Thomas Ramsay to spearhead its activity in the country and Piotr Czapski, the former head of McKinsey & Co’s Eastern European operations, to lead the its new Warsaw office.