Vauban Infrastructure Partners has led the debt refinancing of Finnish power company, Loiste Oy, extending the company’s loan maturities and lowering its interest payment margins.

As a result, Loiste Oy, the parent company of Loiste Group, which is an important utility player in Finland, has been able to refinance existing debt and related costs.

Through its CIF II fund, Vauban IP acquired a 20.34% stake in Loiste Group in April 2019. Since then, Vauban IP has repositioned the company to implement best practice infrastructure debt refinancing, as well as updating the business plan to smooth the Capex process, increase connection fees and prepare for a retail division merger.

The refinancing included an institutional private placement of c. €260m over a 15-year term and a bank loan of c. €60m over seven years. The package also includes capex facilities of c. €110m and a revolving credit facility of c. €40m. In the process, there is considerable margin improvement, better overall company leverage profile and a more flexible covenant structure. As a result, there is more flexibility to diversify Loiste’s business activities in the future.

Most notably, the refinancing allows the company to more efficiently manage its substantial Capex plan which will enable Loise to develop its DSO capabilities over the decade from 2020-2030. A DSO (Distribution System Operator) securely operates and develops an active distribution system comprising networks, demand, generation and other flexible. Loiste’s aim is reach the regulatory 25% Medium Voltage cabling rate by 2028 through network renewal and underground cabling. The new Capex will help the company to increase the security of its electricity supply and withstand severe snow conditions, adding value for all its stakeholder including Vauban IP.

The cash yield profile of Vauban’s investment is well improved with that refinancing while mitigating long-term risk on interest rate thanks to the long tenor of the financing structure.

For further reading:
Vauban Infrastructure Partners
Affiliate of Natixis Investment Managers
Société en Commandite par Actions – Limited Partnership by shares
Share capital : €10 076 680.20
Regulated by the Autorité des Marchés Financiers (AMF) under n° GP – 19000044
RCS Paris 833 488 778
115 Rue Montmartre

Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris

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