Australia / USA – US investment firm Kohlberg Kravis Roberts & Co. LP (KKR) has announced an investment in CMA Corporation, Australia’s largest scrap processing group.
CMA and KKR have been in discussions since December last year. KKR, on behalf of its funds and accounts, made its first investment in the company in March this year when, through a secondary purchase, it became the largest holder of the company’s Syndicated Facility Agreement. This new investment is part of a restructuring proposal announced by CMA and is subject to approval by CMA’s shareholders.
If approved, the restructuring would position CMA for renewed growth and enable the company to recommence trading on the Australian Stock Exchange. CMA has been in voluntary suspension from the exchange since February last year and has been undertaking a capital structure review.
KKR’s investment is about $90 million Australian dollars (US$96.5 million), a source familiar with the deal said.
Jamie Weinstein, Co-head of KKR’s Special Situations group, comments: ‘We see great potential in CMA and are excited by the prospect of assisting in enhancing the company’s capital structure. Working with management, we intend to grow the business over the long term. The recapitalisation will allow CMA to move forward with greater financial certainty, improve the recycling operations of the company and provide greater security for the company’s employees.’
Employing more than 450 people, CMA provides products and services to customers across Australia, New Zealand, Asia and North America. The company’s major activities are the processing and recycling of predominantly secondary ferrous and non-ferrous metal products. CMA employs a variety of advanced, high-end recycling technologies to add value for its end customers.
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