A&O Shearman Represents Apollo On EUR300 Million Financing To Support KME Group’s Buyback Of Cunova From Paragon

A&O Shearman has advised on the definitive agreements pursuant to which an affiliate of Apollo Global Management Ltd (Apollo), the global alternative asset manager, will provide EUR300m in financing to KME S.E., a subsidiary of KME Group S.p.A. (KME), to support KME's previously announced buyback of Cunova GmbH (Cunova) from Paragon.

The transaction encompasses three interrelated elements: the acquisition by KME of Paragon's participation in Cunova, in which KME currently holds a 45% shareholding; the transfer to Cunova of the aerospace business and foundry assets held by KME Germany GmbH, forming the "New Cunova Group"; and the refinancing of Cunova's outstanding EUR170m senior secured debt.

The financing provided by Apollo-managed funds comprises a EUR150m five-year term loan and EUR150m by way of preferred equity, together with warrants issued by the New Cunova Group. In connection with the transaction, Paragon will retain a EUR40m preferred equity interest indirectly in Cunova.

The transaction is designed to create a leading, fully integrated industrial platform in mission-critical copper-based specialty products, incorporating KME's recently developed aerospace business.

The A&O Shearman team was led by partners Peter Banks, Annette Kurdian and Paul Dunbar, alongside partner Josh Baxter, counsel James Funder and senior associates Soyeon Lim and Hershil Kotak.

Peter Banks, partner at A&O Shearman commented: "This transaction is a further example of the strong activity we are seeing in the capital solutions space and we are delighted to be supporting Apollo on this matter. For A&O Shearman, this transaction showcases the power of our integrated capital solutions platform, seamlessly combining debt, equity, and structured finance expertise to deliver holistic advice on transactions that do not fit into traditional financing boxes."