Highbridge to lead Towergate restructure
UK-based Towergate has confirmed an agreement with its senior secured and unsecured creditors to implement a financial restructuring and recapitalisation of the group.
This follows on from Towergate’s confirmation of an agreement with its secured creditors on February 2, 2015.
As a result of the revised transaction, majority ownership of the Group will transfer to the senior unsecured creditors, including funds or accounts managed or advised by Highbridge Principal Strategies, KKR Credit Advisors (US) and Sankaty Advisors. Highbridge will be the largest investor.
With a total of £375 million of new capital being provided under this agreement, the joint proposal results in the same 60 percent reduction in net debt for the company whilst also injecting a further £50 million equity into the restructured business, on top of the additional £75 million of super senior secured notes previously committed by the senior secured creditors.
Alastair Lyons, chairman of Towergate, said: “I am very happy that a consensual agreement has been reached between our senior creditors. This further agreement brings the very difficult last few months to an excellent conclusion.
“The company now has a highly committed shareholder base that has demonstrated its strong belief in the potential of our business by the extent of their investment. The company has a strong balance sheet, having substantially reduced its debt burden, and has almost halved its interest bill. Taken together with the new funds being invested, this gives the company a strong positive cash flow to support the completion of the change programme and the further growth of the business.”
The new majority shareholders added: “We are excited about working with the Towergate team. This Joint Agreement provides the best guarantees for Towergate’s employees, insurer partners and customers. This agreement brings long-term financial strength and stability, and outlines a compelling strategy to strengthen Towergate as a leading UK insurance broker.”
