British insurance broker Towergate Insurance has sold itself to its senior secured creditors, as part of a deal to slash its £1.04 billion debt pile by nearly two-thirds.
The senior bondholders include TPG, Lloyds Banking Group, Pimco and Och-Ziff Capital Management Group, according to sources.
TPG declined to comment, while Pimco, Och-Ziff and Lloyds could not be immediately reached.
Towergate said its senior secured creditors would convert their existing claims into £375 million of new senior secured notes, £150m of subordinated PIK notes and 100 per cent of the ordinary shares of the new holding company.
Following the deal, net senior debt would be reduced by more than 60 per cent, Towergate said, adding that its new consolidated net senior debt burden of about £370m would include £75m of new super-senior notes.
Speculation around a potential restructuring began in November, when Towergate revealed that it had fully drawn its revolving credit facility, casting doubts on whether it could continue as a going concern.
The company then invited the holders of its senior unsecured bonds to pitch for control of it in early December.
Towergate said the deal would not affect the operations of any of its units. It added that it would resume its search for a new chief executive to replace Mark Hodges, who resigned in October, and that Alastair Lyons would continue as interim executive chairman.
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