Reuters reports that OpCapita, the private investment firm that has agreed to buy Kesa Electricals’ loss-making Comet chain in the UK, is confident of securing a line of financing essential for the deal to proceed, a person familiar with the situation told Reuters.
Under the terms of the Nov. 9 deal that saw Kesa agree to sell the 248-store Comet chain to OpCapita for a nominal 2 pounds, OpCapita must secure a 40 million pounds asset-backed lending facility before the Feb. 3 completion date.
If it fails to do so the disposal will not proceed and OpCapita will pay Kesa a 30 million pounds break fee.
A report in Friday’s Times newspaper said OpCapita had yet to secure the 40 million pounds, raising doubts over the Comet takeover.
However, the person familiar with the situation said this was merely a timing issue.
“OpCapita is in negotiations on final documentation of an asset-backed facility with one lender. There are also on-going discussions with a number of other lenders as OpCapita seeks to get the best terms for the financing,” the person said.
“This is the normal course of business in lining up working capital financing for a transaction that does not complete until February.”
The asset-backed facility combined with a 50 million pounds dowry from Kesa and 30 million pounds of equity from OpCapita will provide Comet with the funding to operate in the current environment.
Shareholders in Kesa will vote on the deal at a Dec. 15 meeting.