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Apax to relinquish Marken

Apax Partners is readying medical courier business Marken for sale following collapsed talks with its lenders over a solution to its covenant breach.

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Apax Partners is readying medical courier business Marken for sale following collapsed talks with its lenders over a solution to its covenant breach.

Apax acquired the pharmaceutical focused logistics company from Intermediate Capital Group for £975m (€1.2bn) in December 2009.

According to Reuters, Apax began speaking with Marken's lenders in January, following a breach of its December loan covenants due to declining revenues. An emergency extension was granted earlier in the year, which is due to expire at the end of this month. 

Marken's lenders, which include Lloyds Banking Group, requested an equity injection of £100m in order to reset the covenants, though it has been reported that Apax would only provide £50m. 

As an agreement is yet to be reached, the private equity firm is exploring alternative avenues, including a disposal of the business.

According to the Daily Telegraph, Marken's poor capital structure, coupled with its over-reliance on a small number of pharmaceutical companies, has hindered business operations and its ability to invest. 

Marken has developed a turnaround strategy, although in order to invest and return to growth, the business must first reduce its heavy debt burden.