Mercapital's investment in Spanish textile producer Tavex has fallen through after discussions with the company's lenders came to an impasse.
In February Mercapital agreed to acquire a 49.7 per cent stake in Tavex, which is partly owned by Brazilian group Camargo Correa. Mercapital was in discussions with Tavex's lenders, most of which are Brazilian banks, to restructure the debt in order to accommodate the firm's plans for the business. After failing to come to an agreement, Mercapital decided not to pursue the investment.
Tavex has a four per cent global market share of denim production and 15 per cent share of the European market. In the first nine months of 2011 the company reported turnover of €375.8m.
Tavex's operations in Latin America were a major draw for Mercapital, which is focusing on expanding Spanish companies into the region.
Earlier this year Mercapital merged with N+1, another mid-market Spanish firm, and are soon expected to launch a new fund.