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| Crest Nicholson | |
| Size | £509 million refinancing and debt-for-equity swap |
| Date | September 2011 |
| Financial adviser | Lazard |
| return to the Global Deals of the Year index | |
The troubles faced by Europe’s banking sector in 2011 will inevitably translate into increased corporate distress in 2012 and there is a pressing need for banks to deal with many assets sitting on their balance sheets. Minneapolis-based distressed debt fund Värde’s takeover of UK house builder Crest Nicholson last year could be a sign of things to come. Crest Nicholson, which was taken private in 2007 when it was bought by HBOS and West Coast Capital, had already completed a debt restructuring in 2009 but still had £509 million ($799 million) of debt on the balance sheet. It had a debt to ebitda ratio of 10.2 times and net debt to ebitda of 8.2 times. The firm was symptomatic of what is likely to be a growing trend over the next couple of years – sticking-plaster restructurings that prove insufficient as the global downturn persists.
The UK firm’s debt was held by a bank-dominated syndicate when the US fund, advised by Lazard, decided to build a blocking minority position.
