DEAL: Edcon’s $1.5 billion restructuring

Author: Lizzie Meager | Published: 22 Feb 2017

Edcon’s ZAR19.7 billion ($1.5 billion) debt restructuring was the first major leveraged buyout (LBO) restructuring in South Africa, putting the country’s legal framework and institutions to the test.

The deal, which at one point also held the reputation for the highest-yielding EMEA leveraged loan ever, involved the reorganisation of a complex capital structure including bank debt, senior capital and a number of publicly traded bonds.

South Africa has never before seen a successful restructuring of this magnitude

It saw financial sponsor Bain Capital exit the deal via a debt-for-equity swap, and the bondholders take majority control of the company. Four different New York law-governed notes were also issued, and a term loan was converted to a revolving credit facility (RCF).

“It’s really rare to see this type of deal in the EMEA region, and the good news is it worked,” said Andrew Wilkinson, partner at Weil Gotshal...