Historical Italian paper producer Burgo Group, actually dealing with a complex debt restructuring process, might change of control, MF-Milano Finanza wrote last August 22nd. Founder family Marchi and Mediobanca (owner of a 22% stake in Burgo’s capital) have been contacted by four potential industrial buyers (Lecta, Favini, Upm e Heinzel Group) either for the whole group or for some specific assets.
Lecta, the European paper giant built up by CVC Capital Partners‘s funds, is interested in buy the whole Burgo Group. Favini, an Italian company specialized in special papers controlled by Orlando Italy private equity fund, might be interested as well in the whole business but after its listing on the Italian Stock Exchange which is going to happen in the next few months (see a previous post by BeBeez). Finnish group Upm might instead be interested in buying Burgo’s paper business, merging it with its own paper business and then spin out the whole package to a newco. Finally German group Heinzel is said to be interested in simply buying Burgo’s Ardennes plant and the subsidiary Burgo Distribuzione.
In the meantime the debt restructuring process is at the beginning. The initial idea is that banks might convert part of their credits(for about 350-400 million euros out of more than 1 billion) in some financial instruments. The biggest creditor to Burgo is Mediobanca, with 473 million euros of credits, followed by Unicredit (160 millions), Banco Popolare (56 millions) and Intesa Sanpaolo (37 millions). Mediobanca already completely wrote-off its stake in Burgo’s equity capital and as far as Equita sim analysts are concerned, Mediobanca also wrote-off a 30% of its credits to Burgo.
The most of banking facilities to Burgo are maturing in 2015 and the group asked and obtained a standstill agreement untile the end of 2014 in order to find a solution. Burgo had a net loss of 147.8 million euros in 2013 after a net loss of 38.7 million in 2012 (download here Burgo’s 2013 financial statement) due to 101.5 millions of platns devaluations and after 54 millions of financial expenses (47.4 millions in 2012). Burgo Group0s revenues were 2.3 billions in 2013 down from 2.5 billions in 2012, with 92 millions of ebitda (from 104 millions) and a net finacial debt of 957 millions (from 984 millions).