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Towergate's restructuring saw its senior-secured lenders paying £1 in a debt-for-equity swap, taking control of the company and greatly reducing its £1.05bn debt pile.
Towergate's bondholders, which include TPG, Pimco and Lloyds, have injected £75m into the business in the form of super-senior debt. This will be used for working capital, capital expenditure and to cover the costs of the restructure.
The restructure, which requires approval from 75% of bondholders, will see Towergate left with senior debt of £370m. The transaction has reduced Towergate's leverage from 9.6x to 3.4x.
The new super-senior and senior-secured facilities mature in four and five years' time, respectively. Neither package carries financial maintenance covenants.
Following the transaction, Advent no longer holds an interest in the company, which is now in the hands of its lenders.
It is understood Towergate suffered because of limited rate increases, as well as increased competition. According to the company's full-year results for 2014, income fell by 4% – from £443m in 2013 to £426m in 2014, while EBITDA slipped by 24%, from £145m to £110m.
Advent invested £200m in Towergate in February 2011. Since then, the GP has not taken any dividends from its investment.
Established in 1997, Towergate is a UK insurance intermediary, employing 5,000 people in 100 offices. The company operates across five divisions – insurance brokers, underwriting, direct sales, mortgage insurance, as well as a broker network.
Alastair Lyons is interim executive chairman of Towergate while the firm searches for a new CEO.
Currency movements and good performance boost demand for European secondaries
Its previous vehicle, Partners Group Secondary 2011, reached a final close on €2bn in 2012
Both associates joined the mezzanine house in March