Russia looks juicy to private equity

The senior debt backing the first leveraged buyout in Russia, the acquisition of the fruit juice company Nidan Soki by Lion Capital, has been launched. The bookrunners are Goldman Sachs and UniCredit (CA-BA). VTB is an MLA.

The senior debt totals €204.4m. It comprises a US$100m six-year A loan priced at 325bp, a US$100m seven-year B loan at 375bp and a US$30m revolver together with a US$60m capex facility, both paying 325bp. Banks are invited in on tickets of US$25m for 90bp and US$12.5m for 75bp.

The arrangers say they have structured the deal with the aim of getting lenders “comfortable with a workable debt push-down”.

They believe it could provide a template for further leveraged deals in Russia, which is still a largely untapped market from the private equity point of view.

Following several years of strong economic growth, Russia is now considered a draw for large private equity companies, with sufficient volume to warrant them setting up a permanent presence.

A number of sectors in Russia are booming on the back of buoyant commodity prices, particularly the food and drink and retail segments as consumers continue to see an increase in their disposable incomes. In addition, these companies are often “greenfield” or relatively young companies with the Western-style audited accounts required by private equity and suited to Western capital markets, and in contrast to older companies, which have often been slower to embrace international accounting standards

The next leveraged loan transaction in Russia will come to the market in a few weeks, bankers say.