Allegro to raise €470m as local bank gets top spot

Allegro, the Polish e-commerce platform, is raising Z2bn (€470m) in a dividend recapitalisation, according to bankers. The deal, one of the biggest CEE loans in this year’s pipeline, is being led by three local and international lenders, although some market participants said the Polish banks would be capable of providing all the money.

Bank Pekao, JP Morgan and Goldman Sachs are bookrunners, bankers familiar with the deal have confirmed. Although Bank Pekao was on the original loan, it took a smaller ticket, according to Dealogic data.

Allegro raised Z5.14bn (then $1.2bn) in December 2016 to support its leveraged buyout (LBO) by private equity firms Cinven, Permira and Mid Europa Partners from Naspers, the South African media group.

“Allegro had repaid some of its existing debt, its leverage was going down for a while since the LBO a few years ago,” said a banker at a European lender.

Bookrunners on the 2016 deal were BNP Paribas, Bank of America, Crédit Agricole, Deutsche Bank, Goldman Sachs, HSBC, ING, JP Morgan, Société Générale and UniCredit. Mandated lead arrangers were Bank Pekao, Bank of China, MUFG and PZU. Arrangers were Alior Bank, Commerzbank, Erste Bank and Raiffeisen Bank International.

A banker based in the central and eastern Europe region said: “The syndicate will probably be very similar to the deal Allegro did in 2016, which was structured in London and then syndicated to Polish banks. This deal will have a combination of local and international banks.”

Some bankers are confident that in CEE, local banking markets have developed so much over the last 10-15 years that local banks can now arrange transactions of hundreds of millions of dollars on their own, without international banks.

A recent report by Capital Economics suggested that Poland was on track to be one of the best economic performers in CEE in 2019, despite an anticipated slowdown in GDP growth. The strengthening of the domestic economy correlates with the strengthening of the Polish banking system, according to bankers.

“In Poland, banks can sufficiently do large transactions themselves,” said the CEE-based banker. “For the big [Polish] banks, the single name legal lending limit is around €400m-€500m. Additionally, the structuring capabilities of Polish banks allow them to easily organise different kinds of deals themselves. In the Polish market, a €200m deal is nothing — it can easily be done bilaterally.”

One banker based in Poland said that “most, if not all, Polish banks” were likely to participate on the deal. Although a few domestic banks featured on the 2016 loan, more are expected to join this dividend recap.

A second banker in Poland was slightly more apprehensive: “It’s true that markets in CEE and Poland have definitely grown in recent years and there has been a great consolidation, but [Polish banks] still need the help of their international counterparts, especially if they’re subsidiaries of European institutions, to get larger deals signed off.”

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