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BPEA to take Pioneer private, inject cash, swap out debt
Posted on Friday, 07 December 2018 13:59
Baring Private Equity Asia (BPEA) is participating in a revitalisation plan for Pioneer valued at a total JPY 102.00 billion (USD 904.97 million) to provide stability by securing working capital and management support. The global buyout player will inject JPY 52.00 billion in cash, carry out a JPY 25.00 billion debt-for-equity exchange, and table a JPY 25.00 billion offer to buy out remaining minority shareholders. With Baring’s backing, Pioneer will be able to return the Kawasaki-based manufacturer, which is known for its audio equipment and car electronics systems, back to a sound financial position, given its deteriorating cash flow. The business “experienced challenging financial results with cashflow declines” in the quarter ended 30th June 2018, and, as a result, it started “exploring a range of measures for companywide management reforms”. Following discussions with the sponsor, Pioneer decided it would be best to go private in order to then overhaul its organisational structure and review its portfolio, which would pave the way for a return to a sound operational footing. The third-party share allotment is expected to complete on 1st March 2019, at the earliest, with BPEA set to take full ownership in March 2019. Pioneer is a manufacturer and developer of advanced technologies, such as 3D-LiDAR sensors and high definition maps for autonomous driving, as well as medical and healthcare devices, optical discs, speakers and audio equipment, among other things. Cash flows from operating activities for the financial year ended 31st March 2018, and not including the private placement, are expected to reach JPY 159.00 million (FY 2019: JPY 88.00 million; FY 2020: JPY 127.00 million). In the six months to 30th June 2018, Pioneer booked net sales of JPY 170.93 billion and incurred a net loss of JPY 9.93 billion. © Zephus Ltd