Tapi Group Lenders Review Takeover Proposal From Tikehau Alongside Bids From Two Industrials; Standstill Runs Out End October

Tapi Group creditors are reviewing three proposals that the Italian bottle cap maker received to overhaul its cap stack and provide it with fresh funds, sources told Octus. A standstill agreed over the summer is set to expire at the end of October, setting a deadline for parties to reach a deal.

One of the proposals comes from Tikehau, which controls around half of Tapi’s roughly €146 million bank debt after buying it at discount in the secondary market, and is also an equity holder, following a share pledge enforcement on €35 million mezzanine debt it provided to a Luxembourg vehicle sitting above the Italian holding company. The fund submitted an initial proposal back in June, and over the summer improved the terms on offer, after some other creditors pushed back on the original plan, the sources said. The proposal – under which Tikehau would take over the business – features the injection of new financing to support the company’s turnaround, the conversion of part of the existing debt into equity-like instruments, and a waterfall mechanism linked to a future exit. The improved terms revolve specifically around the waterfall, to offer other lenders better recoveries at the time of exit, they added.

The other two proposals were submitted by third party industrial players and differ substantially from the Tikehau plan, as they offer existing creditors an upfront repayment at deal closing instead of upside further down the line, sources noted.

Tapi seeks to implement a deal consensually with the unanimous backing of its creditors. Should it fall short of 100% approval, it may need to resort to alternative routes, including court proceedings, to execute a deal. While the company is largely performing in line with its business plan and does not have a liquidity crunch given payments under the debt are not due under the standstill, a prolonged restructuring process would significantly impact its performance, the sources added.

Alongside Tikehau’s initial proposal, Tapi had received other four proposals originally, including one from incumbent sponsor Stirling Square, two from private equity firms and one from a trade buyer.

Tapì SpA was acquired by Stirling Square from Wise in the first quarter of 2023 in a leveraged buyout for an enterprise value just above €300 million. A new vehicle, Sunrise Bidco, was set up for the purpose of the acquisition, which was supported by €146 million of senior facilities. The debt package featured financial covenants as well as the mandatory merger between the Bidco and the operating companies within 12 months since the deal’s closing. It was provided by a pool of 13 banks, as reported.

The company’s full-year 2024 accounts show that the senior facilities agreement was later amended to temporarily suspend covenant testing and to extend the deadline for the merger between the Bidco and the Opco first to Dec. 31, 2024, and subsequently to June 30, 2026.

In addition to the senior facilities, the buyout was backed by the €35 million mezzanine debt provided by Tikehau in the first quarter of 2023, which was issued out of a Luxembourg MidCo sitting above the Italian Holdco entity Sunrise Bidco.

Late last year, the company approached both the banks and Tikehau seeking a debt moratorium ahead of some amortization payments due at the end of December. The move was aimed at preserving liquidity while working on a broader recapitalization plan, as reported. However, in January Tikehau enforced on its share pledges, taking over the Luxembourg entity, according to a filing. Following Tikehau’s enforcement, bank lenders also accelerated their claims, while engaging in talks with the company over a proposal to restructure the debt.

In mid-February, Tapi Group’s Italian holding company filed for court protection via pre-concordato proceedings under Article 44 of the Italian code for business crisis and insolvency with the Milan tribunal and was later granted a two-month extension until mid-June to strike a debt agreement with its bank lenders. However, as the company was unable to secure a deal with lenders by the mid-June deadline, it exited the process and will shift to a different implementation route once an agreement is in place. The two operating companies, Italian Tapì SpA and French Les Bouchages Delage SAS, were not placed under court proceedings.

Chiomenti and Houlihan Lokey are legal and financial advisors, respectively, to Tapi while Lazard and Hogan Lovells are assisting Tikehau. Bank lenders are working with Molinari as legal advisor and Alvarez & Marsal as financial advisor, as reported.

The group’s performance has been impacted by excess inventory following the pandemic against a weaker consumer demand, the company noted in its accounts. As a result, revenue in 2024 declined by about 29.5% to about €24.4 million, with negative EBITDA of about €2.4 million due to some one-off, extraordinary costs, without which EBITDA would have been at breakeven, but still down compared with the prior year when it totaled €1.2 million.