Term Loan B creates headroom for Holidaybreak

£30 million Loan, part of £245 million refinancing

Headquartered in Cheshire, Holidaybreak is the leading provider of education-related residential activity trips in the UK. The company operates in a range of markets across Europe, from the UK market leader in residential trips for UK schools, PGL, to the fast-growing, design-led hostel chain, Meininger. Holidaybreak was acquired by Indian-listed travel luxury tour operator Cox & Kings in 2011.

Following the sale of the non-core Eurocamp division, the company sought to refinance the existing debt and create a simplified capital structure. M&G helped facilitate this transaction by providing a longer-dated bullet “Term Loan B” within the banking club to complement the amortising and revolving facilities being provided by the company’s existing relationship banks.

The non-amortising nature of the Term Loan B creates additional headroom in the business plan that gives the company the flexibility to invest free cash flow in growing the business.

The refinancing removes legacy acquisition finance debt, reduces finance costs, simplifies the borrowing requirements, enhances covenant flexibility for the company and extends maturities.

M&G’s presence most notably facilitated the extension of maturity and diversification of lending providers within the simplicity of the club deal – a unique proposition from an institutional investor.

Navneet Bali, Group Finance Director of Holidaybreak Limited, commented, “We are delighted by the continuing support from Holidaybreak’s relationship banks, to have further diversified our lending pool through the new loan from M&G and to have committed five and six-year loan facilities in place.”

James Pearce, Head of Direct Lending, M&G Investments, added “Cox & Kings are driving ambitious growth plans for Holidaybreak and we are excited to be at the beginning of what we hope is a long-term relationship with the company. We are continuing to demonstrate how we can be beneficial to UK mid-sized businesses in a range of situations and the flexibility we offer within the types of loans we provide.”

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