KKR & Co. is to provide about 100 million euros ($135 million) to Italian vending machine operator Gruppo Argenta SpA, its first direct lending in the country.
A combination of debt and equity investments from KKR Asset Management will help the Carpi, Italy-based company repay existing lenders and fund growth plans, the New York-based private equity company said in a statement. An additional 10 million euros will be put into the business by its owners.
KKR is increasing funding of companies that are at risk of breaching debt terms after closing a $2 billion fund targeting distressed borrowers this month. It provided 320 million euros of seven-year financing to the Spanish building materials company Uralita SA last year.
“Existing lenders reached out to us because they want to keep on supporting the company but they need to reduce their exposure under stricter capital rules,” said Mark Brown, London-based director of special situations at KKR Asset Management. “The new capital structure resets covenants and adjusts amortization to allow the company more financial headroom. This is a balance sheet turnaround, not an operational restructuring.”
Argenta, which generated about 200 million euros of sales in 2013, is being hurt by Italy’s stagnant economic growth and an unemployment rate that climbed to record 12.7 percent in November, up from 11.1 percent a year earlier.
KKR has invested more than 2 billion euros in European companies that have difficulty obtaining traditional bank loans, the New York-based asset manager said in the statement.