PHS cleans up its debts with new ownership
A MAJOR deal looks to be on the cards for PHS Group, the large UK hygiene and office services company, as it seeks to cut its massive debts of nearly £1bn in return for handing over ownership to a set of its lenders.
PHS, which was founded in 1963, is now one of the largest providers of office support services in the UK, with a staff of over 5,000 across 140 sites.
Headquartered in Caerphilly in Wales, PHS has over 250,000 customers, with a diverse range of services, from sanitary disposal and water coolers, to document storage and shredding.
However, after years of struggling with debts PHS has been restructuring under chief executive Gareth Rhys Williams, who joined in 2013.
PHS is now believed to be on the brink of an agreement with lenders to cut its debts of nearly £950m by around 60 per cent.
The debt for equity swap will see PHS’s owner, private equity firm Charterhouse, hand over control to a consortium of PHS lenders, comprising a mix of private equity firms, fund managers and hedge funds, including KKR, M&G, Monarch, Anchorage, Davidson Kempner and Halcyon, according to the Sunday Times.
Included in the deal will be a payment in kind (PIK) loan to the lenders, worth around £300m, which will be paid out if PHS is sold.
In its 2013 financial year PHS had revenues of £418.4m, marginally down on £419.1m the year before, while debt from third parties was also steady at £929.6m.