14th May 2018 18:29
LONDON (Alliance News) - Moody's Investors Service said on Monday it has placed its Ba3-PD rating of FTSE 250-listed ZPG PLC under review for a potential downgrade.
This follows the decision from ZPG's board to recommend that shareholders accept the offer by Zephyr Bidco, a subsidiary of funds managed by technology-focused private equity investor Silver Lake Management Co V LLC to wholly acquire the firm for GBP2.20 billion.
Moody's noted that Silver Lake will fund the acquisition through a mix of equity, debt facilities and a revolving credit facility, and will also seek to procure that ZPG will redeem its existing 3.75% senior notes due 2023 once the acquisition is completed.
If the acquisition goes as planned, Moody's expects ZPG's financial metrics to deteriorate in a way that interest coverage and cash flow will weaken.
The review of ZPG will depend on the strategic business plan, financial policy and details on the final financing and new capital structure, and is expected to conclude around the same time that the acquisition is completed, within the third quarter of 2018.
Shares in ZPG closed down 0.4% at 488.00 pence on Monday.
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