CVC Capital Partners will pay $175 million to hang onto its 60% stake in Samsonite, the world’s biggest maker of suitcases and backpacks.
This marks the latest example of private equity-owned companies bought at the height of the credit bubble having to swap debt for equity.
Samsonite needs the fresh capital as a recent decline in international air travel has meant that business is scarce, according to the report.
CVC acquired the luggage-maker just as the credit crisis started in July 2007 in a $1.7 billion deal.
UK government-owned Royal Bank of Scotland has taken a minority stake in Samsonite, which allows it to avoid breaching its banking covenants this month, the report said.
The deal will bring Samsonite’s debt down from around $800 million to $240 million.
D.C.