OIO approves Colorado owner to buy Tegel in $600m leveraged buyout

Tegel chicken sits on sale at an auckland supermarket. Photo / Kenny Rodger

Affinity Equity Partners, the private equity firm that owned the now in-receivership retailer Colorado Group, has been cleared by the Overseas Investment Office (OIO) to buy poultry producer Tegel Foods.

In a leveraged buyout worth about NZ$600 million, Australia's Pacific Equity Partners is selling a 43 per cent stake in Tegel and ANZ and related entities are flicking a 30.37 per cent stake as Affinity buys 100 per cent of Tegel's parent company NZ Poultry Enterprises through a subsidiary, the Singapore incorporated Claris Investments.

Affinity's purchase of Tegel, is backed by financing from a syndicate of banks including ASB's parent Commonwealth Bank of Australia, Westpac, Macquarie Bank and Rabobank.

It's understood this financing will replace Tegel's existing $300 million plus in borrowings in place with ANZ, BOS International, Rabobank and Westpac.

Tegel employs about 1,550 people.

Affinity describes itself as an independently owned Asia-Pacific buyout fund manager run by the former investment professionals of UBS Capital Asia Pacific - the private equity arm of Swiss banking giant UBS AG.

It was spun out of UBS Capital Asia Pacific in 2004. The firm's website says it aims to hold companies for four to six years before exiting and that it manages funds and assets worth about US$4 billion.

Affinity has offices in Hong Kong, Jakarta, Seoul, Singapore and Sydney.

Colorado, which has stores in Australia and New Zealand, was tipped into administration and receivership yesterday owing A$396 million to 18 banks and hedge funds.


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