Could Univar IPO be on the rocks as CVC plans to sell debt?

Man holding for sale by owner sign

The intelligence site Debtwire  reports today that investors in Univar are trying to block moves by majority owner, CVC Capital Partners, to offload a large tranche of its debt. The move would effectively give the unnamed investor a 45% stake in Univar, according to the report.  

If Univar did pull out of the IPO, announced at the end of June, we would want to know why. Univar’s deal to purchase Quaron faces investigation by competition authorities in France. We are also waiting with baited breath for the results of long-running EU anti-trust investigations in European chemical distribution.  

According to the report: “A blocking group of Univar lenders has formed to oppose an amendment to the company’s USD 2.35bn senior credit facility that would introduce a new unnamed sponsor, said five lenders. The chemical distributor is also seeking permission to extend the maturity of its term loans and revolver by two years, and to raise incremental secured debt to fund a dividend. 

The pushback centers around the lack of disclosure about the new investor, who would own more than 45% of the chemical distributor after acquiring the stake from existing sponsor CVC Capital Partners, three of the lenders added. Lenders are also asking for the release of the new ratings profile, a bigger coupon boost and higher fee. 

Under the new plan CVC would take out a dividend and sell an approximate 45% stake to the unnamed suitor. “They want us to do all the accommodations for a new partial owner but they won’t tell us who the new guy is, let alone how much equity if any the new owner is putting in,” said the second lender.”

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