Font Size

- Aa +

Tue 9 Nov 2010 11:14 PM

Font Size

- Aa +

Alliance Medical lenders mull carve up-sources

Several bidders eyeing diagnostics equipment operator owned by Dubai private equity firm

Alliance Medical lenders mull carve up-sources
Alliance Medical tipped to fall into the hands of its senior lenders although several bidders are also eyeing the operator.

UK medical services firm Alliance Medical is facing a crunch time this week as creditors are holding talks about how to slice up the group, sources close to the matter said on Tuesday.

Alliance Medical, which is owned by a Dubai private equity firm, has been tipped to fall into the hands of its senior lenders, two of the sources said, although several bidders are also eyeing the diagnostics equipment operator.

The talks revolve over how to strike a deal with the lowest ranking creditors and majority owner Dubai International Capital Dubai (DIC), part of the ruler of Dubai's investment vehicle, the sources said.

One of the people said: "It's a question of the terms of the deal now, with lenders pretty much in the driving seat."

DIC and Alliance Medical declined to comment.

The two parties could end up with token stakes in the group, which operates equipment for MRI scans and X-rays - in order to reach an amicable outcome.

The debt talks began earlier this year, in a bid to avoid a covenant breach on just under $807.9 million of debt.

But private equity firm Bridgepoint could still provide a last minute alternative, the sources said, having approached senior lenders with an offer to take control. Bridgepoint also declined to comment.

It already owns 16 percent of Alliance Medical after it sold a controlling stake in the business for about $966.9 million to DIC in 2007.

Euromedic and InHealth have lodged rival offers, which will have to be high enough to satisfy senior lenders, owed just under 400 million pounds, to proceed to a last round of binding bids next week.

Another source said: "It has to be enough for the lenders to want to sell, which I don't think has been the case."

A standstill agreement granted by senior lenders which expires on November 15 is adding to the pressures of the deal.

Without a consensual deal with the mezzanine lenders and DIC, Alliance Medical's restructuring could come about through a pre-packaged administration, a court process that allows a company to be sold on minus a chunk of debt.(Reuters)

For all the latest health tips & news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.