Avison Young has successfully completed a recapitalisation of the business, reducing its liabilities by half and securing new capital to advance its strategic goals.
The firm was revealed to have defaulted on a $325m (£256m) senior term loan, missing principal and interest payments over the last two quarters, last month.
The anticipated default came as a direct consequence of renegotiations on the debt with majority shareholder Caisse de dépôt et placement du Québec. The Canadian pension fund invested some $250m into the business in 2018.
“This transaction marks the start of our next chapter for Avison Young,” said chief executive and chair Mark Rose. “Our financial partners recognise that our principals are the heart of our business, and this deal will drive equity value for our shareholders and principals, as well as market-based compensation in the years ahead.”
He added: “We are excited about our prospects as we continue to strengthen and reposition our business as the industry recovers, while delivering best-in-class client service.”
AY said the new financing would give it a “sustainable go-forward capital structure” with a significantly de-levered balance sheet and new money from its financial partners to advance its ability to serve its clients well into the future.
AY staff will continue to own a significant majority – understood to be around 70% – of equity ownership in the company as part of the new deal.
A smaller, independent board of directors, led by Rose as chair, will also be established as part of the agreement, with the new directors announced in the coming weeks.
“We are driving ahead bolstered by our leadership team and energised by the flexibility that our new capital structure provides,” said Rose. “I look forward to working with our management team, new board members and financial stakeholders to advance our strategic priorities.”
UK boss Nick Walkley told EG last month that the restructuring of the debt was the “biggest and most significant part of the jigsaw puzzle” in what had been a year-long negotiation and that the business could now “focus on growing the business and getting on with the job”.
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