PRIVATE equity firm Bain Capital has agreed a debt for equity swap deal valued at $1.5bn for Edcon, the chief executive of the retailer said on Tuesday.Taken private in a highly leveraged R25bn buyout by Bain in 2007, Edcon has struggled to grow at a fast enough rate to pay down debt.“We have been living beyond our means, expenditure was more than our income,” CEO Bernie Brookes told a news conference.Under the deal, Franklin Templeton, one of the world’s biggest fund managers, will become a top shareholder in Edcon, which sells brands such as Tom Taylor, Top Man and Salsa.Other owners are Standard Bank, Barclays Africa Group, FirstRand, Standard Chartered, Investec and Harvard Pension Fund.The retailer has been grappling with an over-leveraged capital structure for several years, after troubles in its credit business in 2014 coincided with an economic slowdown and weak consumer spending in SA.Brookes said Edcon reached “a catastrophic situation in March” and had to choose between s...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.