Private Equity Firm TDR Capital Faces Significant Loss
Abandoning Control of Norwegian Cruise Company
TDR Capital, the private equity owner of troubled supermarket Asda, is set to incur a loss of over £300m after relinquishing control of Hurtigruten, a Norwegian ferry service and cruise line. The move comes as Hurtigruten struggles to stay afloat amidst a slump in sales and rising costs associated with its substantial €1.4bn debt.
Rising Debt Pile and Slumping Sales
Hurtigruten’s financial woes have been exacerbated by its debt pile, which has grown significantly under TDR’s ownership. The company posted debt interest repayments of €214m last year and a €69.8m loss. TDR had provided an estimated €375m to Hurtigruten since 2021 to keep the company operational post-Covid.
Radical Restructuring Programme
As part of the restructuring programme, TDR will abandon its 80% stake in Hurtigruten and hand control to a group of creditors, including Arini Capital Management, AlbaCore Capital, and Barings. The overhaul is expected to be completed early next year.
TDR’s Focus Shifts to Reviving Other Portfolio Companies
The deal will enable TDR to focus its efforts on reviving the fortunes of its other portfolio companies, including Asda and Stonegate, the pub chain that owns Slug and Lettuce. TDR became the majority owner of Britain’s third-largest supermarket in June, but its ownership has been plagued by problems, including an estimated £6bn debt pile and poor management.
Asda’s Decline and Turnaround Efforts
Asda’s market share has shrunk to 12.8%, down from 14.8% when TDR completed its acquisition in 2021. To halt the decline, TDR has tasked retail veteran Allan Leighton with overseeing a turnaround of the business. However, turmoil at Asda has forced an unwanted layer of scrutiny on TDR, which has sought to keep a low profile since its founding.
TDR’s Low Profile Under Scrutiny
Criticism of TDR has culminated in protests, including a cardboard cutout of Manjit Dale, one of the firm’s founders, being paraded outside an Asda store earlier this year. TDR and Hurtigruten were both contacted for comment, but neither has responded.
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