IMM Private Equity has started marketing to lenders as it refinances loans taken out to fund the acquisition of industrial gas producer AirFirst, industry sources said on Tuesday (October 27).

Shinhan Bank, Shinhan Investment Corp., Samsung Securities and NH Investment & Securities are arranging the refinancing. The arrangers need to sell down 900 billion won ($794 million) worth of loans, with Samsung Securities and NH Investment & Securities arranging 20% of the amount and Shinhan Bank and Shinhan Investment Corp. the rest.

The PE firm plans to carry out a 1.15 trillion won refinancing on AirFirst. Existing debt of 750 billion won held by the holding company will be refinanced by IMM PE through a new loan, including a 550 billion-won senior loan, a 150 billion-won mezzanine loan and a 50 billion-won revolving credit facility. The senior loan bears interest of 4% and the mezzanine interest of 6.7%.

IMM PE will also refinance existing debt of 200 billion won that the operations company has held and use a short-term bridge loan of 250 billion won for the new investment. The PE firm is creating a new project fund for the refinancing.

Lenders that plan to participate in the refinancing deal need to issue letters of commitment by early November. The process is likely to be completed in November. 

Potential lenders appear to be positive to the deal due to the company’s consistent cash generation and hopes for a strong financial performance. AirFirst needs to expand its facilities after it was selected as an industrial gas supplier for Samsung Electronics’ semiconductor production line at the Pyeongtaek Campus. It was also selected as supplier for Hyundai Oilbank. (Reporting by Hye-ran Kim)

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