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Johannesburg - Bain Capital, the US private equity firm that owns Edcon, is in talks with the retailer’s biggest funders to refinance debt, according to three people with knowledge of the matter.
Bain won’t abandon its investment in Edcon and is negotiating with debt holders on how to restructure bonds, said the people, who are directly involved in the talks and asked not to be identified because the matter is confidential.
READ: Edcon bonds signal debt overhaul needed
Under current borrowing terms, Edcon needs to start repaying about R4.7bn of euro, dollar and rand debt next year, with another R20bn due by 2019.
Edcon, South Africa’s biggest clothing retailer with more than 1 500 stores across fashion chains including Edgars and Jet, has posted 12 consecutive quarterly losses.
READ: Edcon core profit inches higher, debt concerns loom
Refinancing the bonds may require debt holders to take some losses, the people said.
The process is complex and may take months, because Edcon has bonds in multiple jurisdictions and many debt holders, according to one of the people.
A London-based spokesperson for Bain declined to comment.
The Boston-based company bought Edcon for R25bn in 2007 to tap rising consumer spending in emerging markets.
Edcon’s $456m of junior bonds due June 2019 had dropped to 20 cents on the euro last week from 36c at the start of the year, according to data compiled by Bloomberg, indicating investors expect to take losses on their holdings.
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