Pioneer Credit

A$189 million refinance of The Carlyle Group by a syndicate led by Nomura

September 2020

On 5 December 2019 Pioneer Credit Limited (ASX:PNC) announced it had entered into agreements with funds managed by The Carlyle Group under which Carlyle would buy Pioneer’s senior debt from its banks, who were seeking an exit following some financial difficulties, and its equity via a scheme of arrangement. Under the scheme, Pioneer Credit shareholders were to receive total consideration of A$1.82 per share, valuing the equity at $120 million and completion was expected in April 2020. The intent of the transaction was to privatise the Company with Carlyle as the new majority owner, alongside management.

The debt purchase took place but the scheme failed to complete. Carlyle cited a MAC (material adverse change) clause after the onset of Covid-19 and also alleged other defaults and insolvency against Pioneer. Pioneer refuted these, terminated the scheme agreement and commenced litigation against Carlyle. A settlement was then reached which included a standstill period to refinance the Carlyle debt.

With Azure’s assistance a syndicate of lenders comprising Japanese bank Nomura and several credit funds and private investors funded a new facility of $189 million to refinance Carlyle and fund growth, on 23 September 2020. In a challenging financing during Covid-19 for a company in distress, the facility includes multiple layers of capital and a minority rollover by Carlyle. It also required a restructure of the Company’s subordinated medium term notes.

Pioneer Credit is an ASX-listed company providing high quality, flexible, financial services to support everyday Australians out of financial difficulty.

Azure Capital advised Pioneer throughout the original sale process, the negotiations with Carlyle, the MTN restructure and the refinancing.