cvc completely takes over stella

CVC private equity completely takes over Stella
Thursday, 2 July 2009

Source: http://www.etravelblackboard.com/showarticle.asp?id=94200&nav=98


After acquiring a majority share of Stella group from MFS Limited early last year, CVC Asia Pacific has performed a fait accompli and snapped up all remaining shares left in a bold move yesterday.

Administrators of the collapsed Octaviar today announced the sell-off of the remaining 35% of Stella Group to CVC Capital Partners who, through Global Voyager Holdings, already own 65% of Stella Group.

Additionally, the administrators from Deloitte add, “As part of the consideration for the sale of the shares and loan note, GVH [Global Voyager Holdings] and related parties have agreed to release a claim brought in the Supreme Court of New South Wales against OSH [Octaviar Stella Holdings] and OCV [Octaviar] by GVH’s subsidiary Global Voyager Pty Limited.”

Earlier in the year, Deloitte had issued a memo that Octaviar was making provisions for a $249 million warranty claim for CVC, after it was understood that the private equity company demanded compensation for being sold a dud and would be taking the matter to court.

CVC is understood to have been upset at the $17.2 million before tax earnings result, which was well below the $210 million Stella had forecasted.

By making the disappearance of the court case part and parcel of the sell-off, Octaviar now had one less problem to take care of.

CVC had initially bought the 65% stake in Stella Group for $400 million, and also shouldered $900 million in Stella debts.

It is currently unknown how much the remaining 35% stake was sold for, only that it too was a “Share and Loan Note Sale Agreement”.