DC Advisory advises 3SIIF on the financing of Cargounit

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

• DC ensured all work streams were successfully completed during a complex process

• 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