Payzone cuts debt by sale of stake to Duke Street
PRIVATE Equity firm, Duke Street, has acquired a majority stake in Payzone after investing €45m (£39m) into the mobile phone top-up and cash machine group.
The debt-for-equity deal reduces Payzone’s debt from €320m to €82m and sees the formation of a newly established company, funded by Duke Street and its lenders. Duke Street will hold a 69 per cent share in the company and the current senior management 15 per cent.
Existing shareholders will see their value wiped out after due diligence revealed that the company’s value is below its existing senior debt level.
Payzone chief executive Mike Maloney said: “Regrettably it has not been possible to provide existing shareholders with an ongoing interest in the business.”