BC Partners has lost control of portfolio company Foxtons after agreeing a refinancing deal that will halve the estate agent’s debt burden in return for giving lenders a majority stake in the company.
According to the Financial Times, BC Partners bought Foxtons in May 2007 from founder Jon Hunt for about £360m (€400.5m) in a deal at the very peak of the debt and housing bubble.
The debt deal with banks Mizuho and Bank of America, agreed over the Christmas break, will see BC Partners make an equity injection of around £50m to remain as Foxtons’s largest minority shareholder. Foxtons debt will be cut from about £300n to £120m.
The Foxtons management team, led by chief executive Michael Brown, will receive a minority stake of up to 20 per cent, depending on performance.
The deal does provide BC Partners with certain governance rights and minority shareholder protections that will give it a say in crucial decisions, such a pursuing a sale. The banks will be given board seats.