Centerbridge takes the keys to ATU

The distressed specialist has led a restructuring of the KKR-owned automotive repair business.

Distressed debt investor Centerbridge has successfully negotiated a restructuring of German automotive repair company ATU in a deal which sees private equity owner KKR suffer a loss of about €500 million.

The debt-for-equity swap will see Centerbridge and fellow lenders Babson Capital and Goldman Sachs Investment Partners take control of the company as part of the deal, ATU said in a statement.

ATU will receive a fresh injection of €100 million in equity, whilst its significant debt load will be lessened to the tune of more than €600 million, falling to around €150 million including a fresh senior secured loan of €75 million supplied by HayFin Capital Management which matures in 2018.

The annual coupon payments will be reduced by more than 90 percent, ATU added.

KKR’s holding in the business will be all but wiped out, with it holding just 3 percent of the equity following the restructuring according to reports.

The US private equity group acquired ATU in 2004 for €1.45 billion in a highly-leveraged deal. The firm injected a further €140 million of equity in 2008 to stave off a covenant breach.