Hong Kong-based Unitas Capital has made a joint decision with creditors to sell its holdings in New Zealand’s Yellow Pages for around $700 million, a source close to the deal told sister news site PEI Asia.
The stake is being shopped to large private equity firms and strategic buyers including Australian directory company Sensis, according to Reuters.
It is unclear whether a sale would represent a write-off or loss for Unitas, which in 2007 acquired the company alongside Teachers' Private Capital (TPC) in a NZ$2.165 billion ($1.54 billion) leveraged buyout. The transaction price represented 13.6 times the company’s earnings for 2006.
According to various media reports, Yellow Pages New Zealand owes creditors including ANZ, Westpac and Bank of New Zealand, a total of around NZ$1.8 billion related to the financing package agreed to fund its LBO.
In April, Reuters reported that Yellow Pages Group had signed a standstill agreement to give the company an opportunity to restructure its balance sheet or explore options including a debt-for-equity swap.
TPC’s valuation and stake in the company remains unclear, although Yellow Pages New Zealand is currently listed as a portfolio company on the firm’s website.
Unitas declined to comment. TPC could not be reached for comment.
TPC and Unitas had outbid rivals CVC Asia Pacific, Kohlberg Kravis Roberts and a consortium consisting of Pacific Equity Partners and Bain Capital to win the auction, just before the collapse of the global credit markets. Since then, the company has seen a sharp devaluation in its assets, with New Zealand media reports estimating the company worth around NZ$900 million.
New Zealand witnessed a spike in the total value of divestments in 2009, according to a study released by Ernst & Young and the New Zealand Private Equity and Venture Capital Association (NZVCA). The value of divestments increased ten-fold from NZ$46.5 million in 2008, although the number of divestments declined by 27 percent to eight.
In 2007, private equity firms invested NZ$1.22 billion in New Zealand across 85 deals. While the number of deals stayed almost constant in 2008, there was a sharp dip in total deal value to $178.1 million, according to a separate study from the NZVCA and Ernst & Young.