Background
- The Three Seas Initiative Investment Fund (3SIIF), is a dedicated commercial fund targeting essential infrastructure investments in the Three Seas region, that:
- Targets investments that improve connectivity and cooperation,
- Accelerates economic development by expanding state-of-the-art infrastructure; and
- Supports supply-critical long-term assets
- Amber - a specialist international infrastructure investment manager, was appointed in February 2020 as the exclusive investment adviser to 3SIIF
- Cargounit is a leading Polish rolling stock leasing company, with more than 175 locomotives and c. 36% market share in Poland, and was previously owned by Abris Capital Partners (Abris), a leading CEE private equity firm
- 3SIIF acquired Cargounit in October 2020 with DC Advisory (DC) acting as M&A advisor
- Cargounit was financed by three incumbent banks. These facilities had to be refinanced and further debt was sought to support the growth of the business
Process
- Cargounit engaged DC Advisory to act as exclusive debt advisor across all aspects of the envisaged financing
- DC orchestrated a competitive multi-layered financing process involving incumbent lenders, as well as numerous international, supranational and local Polish banks with substantial experience in the rail sector
- DC supported Cargounit throughout the financing process by advising across work streams such as:
- Process strategy and negotiation tactics
- Negotiating with incumbent banks
- Refinancing existing debt and raising capex facility commitments to facilitate acquisitions of locomotives
- Financial modelling
- Coordination of lender due diligence
- Advice on transaction documentation including SFA, ICA and hedging agreement
Outcome
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DC ensured all work streams were successfully completed during a complex process
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DC secured financing commitments from seven leading international and local Polish banks resulting in 40% oversubscription to the initial financing ask
- DC delivered Cargounit’s key objective to secure a highly attractive financing package allowing Cargounit to pursue its growth objectives, comprising:
- A term loan to refinance the existing debt and pay transaction costs
- A committed capex facility to grow the business
- A working capital facility to fund modernisations and operational needs
- An uncommitted facility significantly enlarging the size of the committed capex facility is documented
- This transaction substantiates DC’s strong expertise in the Polish and European infrastructure sector