Finetoday Holdings Co., a notable player in Japan’s personal care industry, is poised to reward its shareholders with dividends from a $350 million private credit loan. This development comes after the company decided to pause its initial public offering plans.
According to informed sources, Goldman Sachs Asset Management extended the five-year loan to a special purpose vehicle. The cash raised will be funneled directly to Finetoday’s shareholders, and may further serve to finance future acquisitions.
This move aligns with a global trend where companies, particularly private equity firms, are increasingly relying on private credit or bank loans to support dividend recapitalizations. This financial maneuver allows them to distribute returns to stakeholders amidst mounting pressure.
A dividend recapitalization involves accumulating debt on a company to facilitate payouts. This strategy is frequently adopted by private equity firms when traditional exit routes, such as sales or IPOs, seem less viable.
CVC Capital Partners Plc stands as the ultimate shareholder of Finetoday, controlling all stakes through various entities, as noted in an IPO prospectus.
While representatives from CVC Capital and Goldman Sachs Asset Management have chosen not to comment, a spokesperson from Finetoday mentioned that the company has no awareness of the shareholders’ financing.
