By Esha Vaish
(Reuters) - Power plant supplier APR Energy Plc (L:APREN) has agreed to a 165 million-pound takeover by a consortium including its biggest shareholder, after a year dogged by the loss of projects in conflict zones.
The buyers, a group comprising Fairfax Financial Holdings Ltd (TO:FFH), ACON Equity Management LLC and Albright Capital Management LLC, will pay 175 pence a share in cash to take APR private, the company said on Monday.
APR's shares were trading at the offer price as of 1300 BST, down about 2 percent.
They have risen about 88 percent since Oct. 2, the last trading day before APR said it was in talks with the consortium.
Jacksonville, Florida-based APR rents out turbines and generators to cover electricity shortfalls, often in developing markets, where demand has grown as utilities have struggled to keep pace with rapid economic growth.
This has created business for APR, as well as larger rival Aggreko Plc (L:AGGK).
But APR's particular focus on emerging markets has also left it exposed to conflict and political tension. The collapse of a major contract in Libya preceded the company's exit from Yemen in April, due to fighting there.
The suspension of its Libyan contract - the company's largest ever, accounting for more than a third of its revenue last year - pushed APR to the brink of breaching its debt covenants.
The company secured a renegotiation on its credit facility in April, thus avoiding a breach, and was later granted a month's extension of its next covenant testing date of Sept. 30.
The consortium bidding for APR intend to supply $200 million of additional funding to the company within 31 business days of its offer being declared unconditional.
About $150 million of this will be used to repay debt and the rest will be used for working capital and transaction costs.
"Given the volatility of the market, combined with the capital-intensive nature of the business, we believe that APR Energy would benefit from a period as a privately held company as it seeks financial stability," Fairfax Financial Chairman and Chief Executive Prem Watsa said in a statement.
General Electric Co (N:GE), which owns about 16.4 percent of APR's issued share capital through a subsidiary, has agreed to the offer, as have APR's directors, the company said.