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Capital Markets

Hagemeyer outdoes its quiet reputation with mega deal

The Dutch B2B group pulls off a large restructuring to survive a liquidity crunch amid heavy trading of its debt by US hedge funds.

Deal: Hagemeyer's recapitalization
Size: e1.5 billion
Lead arranger and co-ordinator: ABN Amro
Date: February 5 2004

You don't have to be a household name like Marconi or Eurotunnel to go through a fiendishly complex financial restructuring.

For an organisation with more than 20,000 employees in over 60 countries, Dutch B2B distribution services group Hagemeyer has a relatively low profile. It hasn't tried to establish a global brand across its local operations. Its eight different UK businesses, for example, all trade under their own different names.

When one of the UK operations, Newey & Eyre, got into trouble last year, it triggered a nine-month recapitalization process that culminated in a e460 million rights issue, a e150 million subordinated convertible bond, and e905 million of new credit facilities.

Newey & Eyre began losing customers when new IT and logistics systems upset its delivery business. In May 2003, Hagemeyer told lenders that it would breach covenants under several loan agreements because of UK losses.

Hagemeyer's e1.4 billion debt was made up of a e500 million senior bank syndicate; a e150 million subordinated bank syndicate; a $230 million US private placement; and a series of bilateral loans.

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