Buffini to meet with union

Permira, one of Europe’s largest private equity houses, has sent a letter to Paul Kenny, the general-secretary of the GMB union, requesting a meeting aimed at resolving the increasing hostility toward the private equity industry from trade unions.

The letter comes in response to the GMB’s recent call for UK MPs to table an early day motion that Chancellor Gordon Brown drops tax relief for interest payments on loans used by private equity to finance acquisitions.

The GMB is angry that CVC and Permira, the owners of vehicle breakdown service the AA, have sacked just over 3,000 of the AA’s 10,000 workforce in two years, while doubling the company’s profits to more than £200m at the expense of loading it with £1.9bn in debt.

“I understand that some confusion and apprehension exists regarding the way companies such as Permira operate and I am eager to set the record straight,” wrote Damon Buffini, Permira’s managing partner and a personal hate figure for the GMB.

Permira believes it can comfortably service the AA’s debt, even arguing that its total debt to Ebitda levels are lower now than when it first bought the company with CVC in 2004 for £1.75bn.

“We are committed to having an open and constructive relationship with trade unions; as such I would be keen to hear your views on private equity and on how Permira can continue to play a positive role in securing the futures for businesses and workers in the UK and across Europe,” Buffini added.

“On behalf of the many thousands of GMB members sacked by Permira at the AA and the many hundreds due to be sacked at Birds Eye, we sincerely hope this is not a PR stunt,” a GMB spokesperson stated.