DC Advisory co-advised HitecVision on the raise of a junior debt facility that supports their acquisition of a 20% stake in Fortum Oslo Varme

Background

• Fortum Oslo Varme is Norway's largest supplier of district heating, supplying 36% of district heating generated in Norway in 2021
• HitecVision is a leading provider of institutional capital to Europe's energy industry
• DC Advisory (DC) advised a consortium of Hafslund Eco, Infranode and HitecVision on the acquisition of a 50% stake in Fortum Oslo Varme in March 2022
• When agreeing to acquire Fortum Oslo Varme, HitecVision secured senior debt facility at the BidCo level
• In addition, HitecVision sought to optimise the capital structure against their proportionate stake in Fortum Oslo Varme, by raising additional financing through a junior facility at the MidCo level, prior to completion of the acquisition

Process

• DC was jointly mandated by HitecVision to provide debt advice on the raise of a junior facility prior to the completion of the acquisition of Fortum Oslo Varme 
• DC and the co-advisor managed the financing process, managing a number of potential lenders, and negotiating documentation in order to secure optimal junior terms for the acquisition financing package
• DC supported HitecVision throughout the financing process, leading a number of detailed workstreams, including:
  
  • debt structuring;
  • financial modelling;
  • overall debt process management;
  • preparing an information package for submission to selected institutions; and
  • co-ordination of lender communication and full documentation negotiations

Outcome

• DC and the co-advisor were able to deliver a market-leading outcome, securing HitecVision’s objectives, during an extremely tight process timeline, including:
  • Securing a competitively priced, fixed-rate junior debt facility;
  • Negotiating highly tailored terms, including PIK-able features and flexible covenant suites;
  • Successfully completing the debt raise prior to acquisition completion
• The outcome is a flexible junior financing package with competitive terms designed to facilitate HitecVision’s investment in Fortum Oslo Varme