Next Capital acquires embattled leasing company Silver Chef
Private equity firm Next Capital has acquired hospitality equipment leasing business Silver Chef.
The ASX-listed company announced to the market it has entered into a binding scheme implementation agreement with a consortium of investors led by Next Capital to be paid a cash consideration of $0.70 per share.
The deal follows Next Capital’s takeover offer in April of $1.00 per share, but is still higher than Silver Chef’s previous closing price of $0.31.
Silver Chef got into financial strife early last year after exiting its GoGetta equipment financing brand. Silver Chef posted a statutory net loss after tax of $11.7 million and a near 17 per cent drop in revenue (year-on-year) for the FY2019 first half.
“Today’s announcement represents the culmination of extensive negotiations with Next Capital and the company’s financiers and takes into account the prospects facing the company in a constrained funding environment and the urgent need to cure the covenant breaches to ensure the ongoing support of the company’s financers,” the company stated.
As of 30 June 2018, Silver Chef has remained in breach of debt agreements.
“The independent directors have also weighed up the material risk of Silver Chef not receiving ongoing support from financiers and that it may be required to repay its credit facilities within a short timeframe without that support,” said Silver Chef chair of the independent board committee Sophie Mitchell said.
“The scheme consideration provides certainty of value to Silver Chef shareholders and an ability to share in the potential upside from the run-down of the GoGetta business,” Ms Mitchell added.
Sheridan Randall, 5th July 2019
