Private equity firm walks away after taking £365m hit following purchase of German boatbuilder in 2007
Private equity firm Bain Capital is to walk away from its investment in Bavaria, one of the world’s most prolific motorboat and yacht builders, after suffering a £365m loss.
Bain bought Bavaria for ?1.3bn in 2007, a sum understood to comprise of ?400m of Bain’s own capital, plus borrowings of ?600m from Goldman Sachs and ?300m from Dresdner Bank, which was bought out by Commerzbank in 2008.
But poor boat sales as a result of the global downturn meant Bain struggled to make good its investment and it has now handed the reins of the German boatbuilder to two US-based distressed debt investors.
Oaktree Capital Management and Anchorage Advisors have bought Bavaria’s debt for ?300m, it has been reported, in what is one of the biggest debt-for-equity transactions since the credit crisis began.
Bain is not the only private equity firm to get burned by the leisure marine market. Candover was forced to write down its investment in Italian builder Ferretti earlier this year, and more recently, BC Partners was forced to relinquish control of marine equipment manufacturer Dometic to its main lenders.
