E-Malt.com News article: South Korea: Oriental Brewery’s owners seeking funds to refinance the loans for its purchase

KKR & Co. and Affinity Equity Partners Ltd. are seeking 1.5 trillion won ($1.25 billion) to refinance loans they used to buy South Korea’s Oriental Brewery Co., Bloomberg cited three people with direct knowledge of the matter on June, 4.

The funds may borrow 1.4 trillion won in term loans and 100 billion won in revolving loans from lenders led by Korea Development Bank, said the people, who asked not to be identified as the plans are private.

The facilities may have maturities of as much as five years and may pay interest of between 300 basis points and 350 basis points more than the three-month certificate of deposit rate, two of the people said.

Anheuser-Busch Inbev NV, the world’s largest brewer, said in July 2009 that it completed its sale of South Korea-based Oriental Brewery to KKR for $1.8 billion. Affinity, a Hong Kong-based buyout fund, paid KKR $400 million for half the brewer’s equity and took on half its debt, according to a Financial Times report at the time.

KKR borrowed $310 million for the acquisition from lenders including Calyon, JPMorgan Chase & Co. and Natixis, according to data compiled by Bloomberg. The New York-based company also raised 752 billion won from five-year term loans and similar- maturity revolving loans provided by banks including Hana Bank, HSBC Holdings Plc and Sumitomo Mitsui Banking Corp.

The loans paid interest of between 525 basis points and 600 basis points more than benchmark rates, the data show. A basis point is 0.01 percentage point and in a revolving loan, money that’s been repaid before maturity can be borrowed again.

Richard Barton, a Hong Kong-based spokesman at KKR’s public relations firm Kreab Gavin Anderson, declined to comment on the refinancing. There was no immediate response to an e-mail sent to Affinity Chairman Tang Kok Yew, and an official at Korea Development’s M&A department declined to comment or to be named.



04 June, 2010