The shareholders of Japanese personal care business Finetoday Holdings Co. will receive dividend payouts funded by a $350 million private credit loan, after the company shelved plans for an initial public offering, according to people familiar with the matter.
Goldman Sachs Asset Management provided the five-year loan to a special purpose vehicle, the people said, who asked not to be identified discussing private matters. The proceeds will be distributed to Finetoday’s shareholders and could also be used to fund potential acquisitions, they added.
The financing reflects a broader global trend in which borrowers, particularly, private equity firms, turning to private credit or bank loans to fund dividend recapitalisations as they face mounting pressure to return capital to stakeholders.
A dividend recapitalisation, where sponsors load debt onto a portfolio company to fund a payout, is a common private equity strategy to meet return targets when conventional exits, such as a sale or IPO, are not viable or attractive.
CVC Capital Partners Plc is Finetoday’s ultimate shareholder, owning all stakes in the firm through several vehicles, according to an IPO prospectus.
Representatives for CVC Capital and Goldman Sachs Asset Management declined to comment, while a Finetoday spokesperson said the company has no knowledge of the shareholders’ financing.
By Megawati Wijaya and Yasutaka Tamura
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