Barracuda, the c200-strong managed pub operator, is close to completing a refinancing, which will see a US hedge fund take a significant stake in the Smith & Jones operator.
According to the Sunday Times, the group is close to securing a cash injection from Varde Partners, the hedge fund that recently rescued Crest Nicholson. It is thought that Varde will get a significant stake in exchange for its cash in a deal that could be finalised this month.
The report said it was unclear whether the refinancing will see the US firm swap any of its loans for equity, but that Barracuda was trading well. In May, M&C Report revealed that former Mitchells & Butlers (M&B) executive Roger Moxham was to replace Mark McQuater as the group’s chief executive. According to the newspaper, Varde has taken advice from Adam Fowle, former chief executive of M&B regarding the refinancing, although he is not expected to join the company after the completion of the deal.
M&C Report revealed in March that the group was exploring a restructure after the failure to secure £200m of new investment.
It is understood that the restructuring process has been complicated by the number of investors the group has and the fact that its debt is spread across its propco (c£100m) and opco (c£60m).
In 2009, Barracuda completed a restructuring of its debt, which saw its banking partners undertake a debt-for-equity swap, assuming a significant stake in the business. The amount of debt in place at Barracuda was reduced by £84m to £163m.