Equity group's takeover of Payzone will save 500 jobs
THE private equity group Duke Street will take over the business of failed payments group Payzone, in a move the company says will safeguard jobs and ensure all creditors are paid.
Under the deal, receivers from Ernst & Young will be appointed to Payzone and Duke Street will invest €45m in the business.
Following this restructuring, Duke Street will have a controlling stake in the business and the amount of debt owing to the firm's group of banks will be reduced from €320m to €82m.
Payzone emerged from the 2007 merger of Irish e-payments group Alphyra and British ATM operator Cardpoint but has struggled under its heavy debts since the financial crisis.
"The financial restructuring will be executed without any interruption to the Payzone business. Consumers will continue to be able to top up their mobile phones, pay utility bills and withdraw cash from the group's networks of ATMs," the company said.
It also said the restructuring would help to safeguard 500 jobs in Britain, Ireland, Germany, Romania and Greece.
The receivers will dispose of the direct subsidiaries of Payzone and form a new company, in which Duke Street will have a 69pc stake. The banks will hold 16pc and senior managers 15pc. Duke Street is an active private equity group, with offices in Britain and France, and more than €2bn under management.
Duke Street said it saw "attractive opportunities" to grow both Payzone and Cashzone, thereby strengthening the leading market positions they already held.
"In Payzone, the growth is expected to come from launching new payment services and targeted complementary acquisitions. The independent ATM markets in both the UK and Germany are fragmented and Cashzone is well placed to lead a consolidation of the sector," the group said.
Payzone chief executive Mike Maloney will continue to run the new entity, the company said.