Three years after participating in its largest ever deal in Japan, CVC Asia Pacific has “given up” on its stake in Skylark, the country's largest restaurant chain, according to Reuters.
CVC will hand its holding in Skylark to Chuo Mitsui Capital, a private equity fund owned by Chuo Mitsui Holdings, and in return be absolved from having to repay loans taken out to finance the purchase of its stake in the company, a spokesman in Tokyo told the newswire.
CVC could not be reached by press time.
The acquisition of Skylark in June 2006 was a landmark deal in Japan and, according to CVC, remains the largest management buyout ever recorded in Asia. Alongside the private equity arm of Japanese financial services group Nomura Holdings, CVC backed Skylark's management in a take-private deal that was worth about $2.4 billion. The two firms acquired Skylark through an investment holding company, Asia Easteries Holdings.
The deal gave CVC a 35.6 percent stake in the company for approximately ¥60 billion ($639 million; €446 million), according to Reuters. The firm’s stake was subsequently reduced to about 20 percent when Skylark sold additional shares to Nomura in December last year to raise fresh capital.
Established in 1970, Skylark is the largest restaurant operator in Japan with about 4,400 outlets. In 2008, the company had a turnover of $4 billion.
Skylark is not the only portfolio company to be causing headaches for CVC Asia Pacific. Australia's Stella Group recently completed a restructuring following reported negotiations with lenders in January over the repayment of A$860 million ($724 million; €504 million) in debt. As part of that recapitalisation, UBS is believed to have written off more than A$500 million in debt in return for a stake of between 35 percent and 40 percent in the company.
Also in Australia, PBL Media, another CVC portfolio company, was restructured in December 2008. The buyout firm injected a further A$335 million into the media group as part of an A$445 million recapitalisation package; in return, banks relaxed debt covenants on the group.