Charterhouse Capital Partners pledged to provide as much as 50 million euros ($57 million) to Bartec GmbH to win looser debt terms for the oil-industry equipment maker, according to people familiar with the matter.
The private equity firm told Bartec lenders that it plans to inject 20 million euros in cash via new equity and to provide 30 million euros through a senior loan, said the people, who asked not to be identified because the information is private. It also asked creditors to ease debt rules for 18 months and to extend loan maturities by more than two years to at least 2021, the people said.
Earnings at Bartec, which Charterhouse bought in 2012, have missed forecast because a collapse in crude prices has hammered demand for its safety devices. The Bad Mergentheim, Germany-based company will seek to reduce its reliance on the oil and gas industry under a new business plan, the people said.
To win consent from lenders, Charterhouse offered a 200 basis-point increase in loan margins using payment-in-kind notes and a one-time fee of 50 basis points, the people said. The company aims to conclude the deal by early June, they said. Charterhouse’s new loan to Bartec will have the same seniority as current debt.
The covenant waiver would allow Bartec to skip a requirement to have net debt of less than six times a measure of earnings at the end of April, the people said.
Charterhouse financed the acquisition of Bartec with about 348 million euros of loans. Bartec raised another 149 million euros in 2014, according to data compiled by Bloomberg.
Oil prices have tumbled about 60 percent since Charterhouse acquired Bartec.