Offshore lender flicks the switch on CHAMP’s Gerard – The Australian Financial Review

Is this the blown globe that cuts financial power to the ailing Gerard Lighting?

Street Talk can reveal one of the lenders toAustralasia's largest lighting distribution and partnership network is set to sell its loan.

While it should be noted that there's nothing official yet - and it's a sensitive time in the business -sources pointed to the leveraged finance arm of industrials giant Siemens as the seller.

Siemens is believed to have about a $20 million to $30 million exposure to Gerard,and Bain Capital Credit, the rebadged Sankaty Advisors, is tippedas the buyer.

Bain Capital Credit knows the company well. It picked up a stake in Gerard's debt stack when itbought GE Capital's Australian and New Zealand commercial finance business in 2015.

If the trade is successful, it's understood Bain Capital Credit is supportive of turning the business around and injecting new money into it.

It's the latest development at Gerard, and comes as the company and its private equity owner CHAMP have been in regular meetings with the lending group, led by Westpac. The bank is known to have had Gerard on its"troubled" list for some time.

Gerard is behind well-known lighting brands such as Pierlite, Sylvania, Crompton and Moonlighting. The business operates in a fiercely competitive industry subject to intense pricing pressures as imported products jostle for extra sales. CHAMP made a $186 million takeover in 2012 which in hindsight wasn't one of their best moves.

The Gerard family originally floated the business on the ASX in mid-2010 but still had around half of it after the IPO.

As first reported by this column in May 2016,UBS had been working with CHAMP on strategies for Gerard which could include the sale of a unit, a partnership with an offshore group or a broader deal involving the company in its entirety. However, the process was put on ice earlier this year.

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Offshore lender flicks the switch on CHAMP's Gerard - The Australian Financial Review