SLV Lighting Retains Rothschild as Financial Advisor Ahead of Potential Covenant Breach

Reporting: Robert Schach German lighting fixtures company SLV Lighting appointed Rothschild as financial advisor to evaluate options ahead of potential covenant pressure in March next year, when the current holiday on the group’s 6.25x net leverage maintenance test expires, sources said. The company was 5.9x net levered and 6.56x levered on a gross basis at the end of June, leaving it with little headroom under the test, as reported. It has been underperforming amidst a challenging macroeconomic backdrop, which will unlikely improve anytime soon. As a result, SLV will struggle to pass the net leverage covenant when testing resumes, sources said. However, according to the documentation, sponsor Ardian would only be able to make an equity cure relating to breaches of the RCF covenants, but not to a breach relating to SLV’s term loans, which means that it would need to request a waiver from lenders, sources said. The covenant holiday was part of an an amend-and-extend deal SLV agreed with lenders in March 2023 featuring a €30 million equity injection from sponsor Ardian and a 175 bps margin uplift to push out maturities by three years. SLV Lighting was advised by Kirkland & Ellis and Marlborough Partners on the[...]