Reuters: Private Equity: UPDATE 1-KKR puts $1.8 bln Bis Industries up for sale - sources

Reuters: Private Equity Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-KKR puts $1.8 bln Bis Industries up for sale - sources Jun 21st 2012, 10:01 Thu Jun 21, 2012 6:01am EDT * KKR had been in talks with banks on refinancing loans - sources * KKR, TPG all face June 2013 refinancing deadline By Stephen Aldred and Narayanan Somasundaram HONG KONG/SYDNEY, June 21 (Reuters) - U.S. buyout firm KKR & Co has put up for sale Bis Industries Ltd, valued at around $1.8 billion including debt, after talks to refinance the loans used to buy the Australian company stalled, sources familiar with the matter said. KKR, which faces a June 2013 deadline to repay A$905 million ($922.06 million) in loans it used to acquire Bis in 2006, has opened a data room for prospective buyers, the sources said. With IPO markets frozen and buyers in short supply, private equity funds are being forced to hold assets longer than the usual three to five years. The debt used to fund these deals usually expires after five years and now needs to be refinanced at more expensive rates. KKR had been in discussions with commercial banks to refinance the debt, said the sources, who declined to be named because the talks were private. The debt on KKR's original loan for Bis, which has operations in coal mining, steel and iron ore, paid a margin of 225 basis points over the benchmark Australian Bank Bill Swap Bid Rate (BBSY). Thomson Reuters publication Basis Point reported that leveraged loan margins for new five-year deals in Australia are at least 450 basis points over BBSY, although KKR will pay less as it is seeking debt for only 18 months on an existing business. Companies in Asia are tapping non-traditional funding avenues to overcome difficult IPO and bank loans markets. TPG Capital is considering an expensive high-yield bond, a path taken earlier this year by KKR, according to a source familiar with the matter. KKR, which has around $62 billion in assets under management globally, became the first private equity fund to use a high-yield bond to refinance a buyout loan in Asia when it took out a $300 million five-year bond for Singapore technology company MMI International. KKR had previously looked at IPO exits for both MMI and Bis, while TPG had previously looked at an IPO for Singapore precision engineering firm United Test & Assembly Centre. Bis and KKR declined comment. TPG could not immediately be reached for comment. Basis Point reported KKR's plan to sell Bis on Wednesday. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions