International edition
October 27, 2021

The deadline for agreeing the debt-for-equity swap is June 3

BC Partners to lose control of Greek casino group Regency Entertainment

(UK / Greece).- Private equity firm BC Partners is set to hand over troubled Greek casino operator Regency Entertainment to lenders in a debt-for-equity swap, banking sources said last week. A co-ordinating committee of Regency lenders, which include Deutsche Bank and Park Square Capital, presented the debt restructuring plan at a meeting in London, the sources said.


he lenders created the plan in collaboration with Regency's management and BC Partners after a breach of covenants on a 700 million euros (us$ 998.4 million) loan. The restructuring will remove the company's 200 million euros mezzanine loans, which were raised along with 480 million euros senior loans in 2006 to back BC Partners' buyout of Regency, the banking sources said.

Regency's earnings tumbled as Greek consumer spending fell amid the country's escalating sovereign debt crisis. The gambling business has also been hit by a drop in the number of foreign tourists. BC Partners, which recently agreed to buy Italian clothing retailer Gruppo Coin, declined to comment.

The senior loans will be converted into a single five-year loan, paying interest margins of 300 basis points over EURIBOR in cash and 100 bps as a Payment-In-Kind loan, the sources added. The loan will not have amortization payments. PIK loans allow companies to roll up interest payments for payment at a later date, which eases pressure on the company's finances by reducing its cash outflow. Lenders may also provide 35 million euros of new debt, which would be senior to the new restructuring loan.

BC Partners' equity stake in Regency, which operates casinos in Mont Parnes and Thessaloniki, will be reduced to 15 % after the restructuring. Mezzanine lenders will swap their debt for a majority stake of 72.5 % in return for writing down their loans and senior lenders will hold a stake of 12.5 percent in the company. All shareholders stakes will be diluted after new management receive a 10 % stake in the business as part of a management incentive plan.

The plan has the support of other key lenders, including debt investment funds Avenue Capital, Carlyle Group and Castle Hill. The deadline for agreeing the debt-for-equity swap is June 3, banking sources said.

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