Bankers are putting together debt financing of up to €7 billion to support a potential sale of thyssenkrupp AG's elevator business, Reuters reported Sept. 26, citing banking sources.
The sale process, which started earlier this month, is expected to progress within the next two weeks following the dismissal of CEO Guido Kerkhoff, who lost the trust of investors after the German conglomerate struggled under his watch, the report said.
KONE Oyj, Schindler Holding AG, Hitachi Ltd. and several private equity firms are said to be interested in striking a deal.
If thyssenkrupp sells the whole unit, around €7 billion of debt would be placed, or about 6.5 times larger than the segment's EBITDA. A minority stake of 40% would place debt at about €2 billion at the holding company level that would be leveraged, along with some €800 million-equivalent of debt at the operating company level. Debt is expected to include leveraged loans and high-yield bonds, denominated in euros and dollars, according to the newswire.
Reuters said lenders prefer an outright sale, which enables higher underwriting fees and allows cash-rich investors to deploy a decent amount of paper. Servicing debt for a minority stake sale would be more complicated as it involves upstreaming dividends.
