Embattled car parts retailer and distributor, Bapcor (ASX:BAP), has won significant support from its bankers as it prepares to announce a significant loss for the year ending June 30 and decides whether to fight a takeover approach from an American private equity firm.
The company revealed on June 11 that Bain and Co., the US group, had offered a non-binding $5.40 per share, with a slew of conditions attached (typical for an indicative offer), including the crucial one in this case: due diligence.
This news caused the shares to jump from $4.36 on June 7 (before the long weekend) to $5 last Friday.
Bapcor stated that its board will consider Bain's approach.
On Monday, it announced the refinancing of $200 million in debt due to mature in July 2025. The deal increases this amount to $300 million and splits it into two parts, now maturing in July 2028 and July 2029.
Bapcor reported strong lender interest in the refinancing, "reflective of Bapcor’s attractive market and business profile, which enabled an increase in total available limits and the addition of a new financier to the syndicate."
"The refinancing terms and pricing are solid, combined with an extended maturity profile," the company added.
"With the completion of this debt refinance, Bapcor now has access to a total $720 million debt facility, including ANZ, Westpac, NAB, Citi, SMBC, and MetLife."
"This transaction further strengthens Bapcor’s financial position and provides additional funds for general corporate purposes," the company said.
George Saoud, Bapcor’s acting chief financial officer (named just last week), expressed satisfaction with the refinancing outcome in Monday’s statement.
"We appreciate the continued support of our banking partners, and with their backing, Bapcor has bolstered its financial foundation. The new debt facility offers competitive terms and pricing and positions us well for future growth," he added.
While the new financing deal alleviates immediate pressure, Bapcor still faces the challenge of restructuring to escape the current slow sales and high-cost trap, particularly in its retail business centered on the Autobarn chain. This will be a daunting task.
