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. Last Updated: 07/27/2016

Nidan Soki Buyout May Start Trend

LONDON -- The launch of the country's first leveraged buyout financing for fruit juice maker Nidan Soki raises the prospect of increased private equity activity in Russia, bankers close to the deal said Thursday.

"The Russian leveraged buyout market could well take off," a banker close to the deal said.

"The product is suited to the country -- private equity firms see high growth," the banker said, adding that the level of information disclosed fit the market's need for detailed credit analysis after recent market turmoil.

Senior debt totaling $290 million to fund the Nidan Soki deal was launched to banks at a meeting in Moscow on Thursday, as Western Europe's buyout markets continue to suffer the ill effects of the subprime crisis.

"The deal is the first LBO in Russia and as such is exciting, irrespective of the timing," the banker said.

The loan, which has been underwritten by Goldman Sachs, UniCredit and VTB, backs Lion Capital's acquisition of a majority stake in Nidan Soki.

Lion Capital was initially poised to buy 100 percent of the company, but shareholders negotiated to reinvest the sale proceeds to retain a 24.99 percent stake, bankers said.

The deal consists of $200 million of acquisition debt, $90 million of undrawn facilities, $62.5 million of mezzanine loans and $42.5 million of paymen- in-kind loans.

The deal is almost exclusively targeted at bank investors and carries shorter maturities of six and seven years rather than the eight- to nine-year institutional tranches seen on West European LBOs before the crisis.