Germany’s retailer tackles debt with hefty equity input

Bloomberg

German beauty retailer Douglas GmbH is tackling its 2.1 billion-euro ($2.5 billion) debt pile after struggling through a series of pandemic-fueled lockdowns that shuttered its stores across Europe for almost a year.
The 179-year-old firm, owned by CVC, is seeking to refinance its bonds and loans with new debt supported by a 220 million-euro equity injection. CVC was coming under increasing pressure to find a solution as Douglas was due to repay most of its existing debt in 2022.
The company will raise a new loan worth just over 1 billion euros and will issue 1 billion euros of “other senior secured debt”. It will also raise 300 million euros of junior debt that will be sold in the form of so-called payment-in-kind notes, people familiar with the matter said, asking not to be identified because the information is private.
The company’s existing loans and bonds will be repaid at par. Douglas’s 335 million euros of bonds due July 2023 were trading as low as 33 cents on the euro in April last year but they have since recovered to near their face value.
Meanwhile its loans fell to below 60 cents in the euro in March 2020, but the broad market rally—and the prospect of a refinancing—drove the price higher to around 98.5 cents before the new deal was announced.
A call with investors to discuss the loan will take place March 16 at 10am London time.
A spokesperson for Douglas didn’t immediately respond to a request for comment.