Investor AB’s Moelnlycke Said to Start Loan Refinancing Talks

Moelnlycke Health Care AB, the Swedish maker of wound-care products, began discussions with lenders to replace debt raised to back its acquisition in 2007, according to four people familiar with the deal.

Banks may lend more than 1 billion euros ($1.3 billion) to the company, said three of the people, who asked not to be identified because the transaction is private.

Moelnlycke plans to raise senior debt and seek an investment-grade credit rating in the second half of the year, owner Investor AB said last month. “This will lower financing costs, create higher flexibility and enable us to receive cash distributions,” it said.

Ann-Kathrin Halvorsen, a spokeswoman for Gothenburg, Sweden-based Moelnlycke, declined to comment. Oscar Stege Unger, a spokesman for Investor AB, declined to comment on the financing beyond the information in the company’s report.

Moelnlycke raised about 2 billion euros of leveraged loans in 2007, the first portions of which mature next year, according to data compiled by Bloomberg. The Swedish company’s net debt totaled 1.4 billion euros in March. Earnings before interest, taxes, depreciation and amortization for the year to March were 324 million euros, Investor said.

Investor AB (INVEB), the Wallenberg family’s publicly traded holding company, and Morgan Stanley acquired Moelnlycke from Apax Partners LLP in 2007 in a deal valuing the business at about 2.9 billion euros. In 2010 Investor paid 510 million euros to buy a 34 percent stake owned by Morgan Stanley.

To contact the reporters on this story: Stephen Morris in London at smorris39@bloomberg.net; Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.

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