Alliance Medical, a UK medical services business owned by a top Dubai private equity firm, has secured a two month extension to restructuring talks as it continues to seek a buyer, people close to the discussions said.
Senior lenders of Alliance Medical, which is owned by Dubai International Capital, have agreed to extend a standstill agreement that was due to expire on September 16 to mid-November, after the firm received expressions of interest from potential bidders on Monday, the sources said.
The extension gives Alliance Medical time to either clinch a deal with a buyer, after it was put up for sale at the end of August at the behest of senior lenders, or put together a new one with incumbent owner DIC, the private equity vehicle of Dubai’s royal family.
Alliance Medical, which operates diagnostics equipment for MRI scans and X-rays among others services, is seeking fresh capital to avoid breaching covenants on an outstanding loan of just under $781.8 million.
DIC, along with the company’s junior mezzanine lenders, had tabled a bid to inject $54.7 million of new money into the business, which was spurned by senior lenders.
DIC and the mezzanine investors are still mulling their own bid to restructure the company’s debt, one of the sources said, adding that this might include a bigger capital injection.
Non-binding offers will be due in mid-October, while binding offers are expected in November.
Alliance Medical had been valued at between $465.6 million and $531.6 million, meaning that equity owners and mezzanine creditors could see their investments wiped out, one of the sources said.
DIC bought Alliance Medical from Bridgepoint in 2007 for 600 million pounds. Bridgepoint retains a minority stake in the company.
Alliance Medical declined to comment.(Reuters)
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