Cerberus Capital Management, the US private equity firm best known for investing in distressed assets, is holding talks with the owner of the heavily indebted up-market taxi firm Addison Lee. Investors say that this offers a potential lifeline for the company in increasingly urgent attempts to find a buyer, in the face of a need to refinance debt next year.
Addison Lee has been owned by Carlyle since 2015 and a sale process handled by Bank of America Merril Lynch and Rothschild has been happening sporadically for several months. Initial hopes that Carlyle would show a healthy profit on its investment have evaporated in the face of mounting losses and apparent difficulty in refinancing around £200m of debt which falls due next April. The company has annual turnover of more than £350m but generated a loss of £39m in its last published accounts.
Last month, it was reported that creditors at a number of options for taking control of the company and speculation suggests that a number of bids have been received which offer little or no premium to the company’s net debt. The risk of a pre-pack administration being required to enable the company to be sold seems to have grown and it is said that Carlyle wishes to resolve the situation before the year-end.
It is not clear what price Cerberus is offering, or even if it has submitted a formal bid but investors say that it would be well placed to take on the business, with much experience of restructuring such companies and that it could offer a solution to the problem.
Cerberus is not willing to comment.