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Like virtually every other investor -- if not all of them -- Apollo
Management LP has taken some hits over the past year.
Most notably, the liquidation of Linens Holding Co., the owner of housewares retailer Linens 'n Things, wiped out Apollo's 99.59% equity stake. But the private equity firm and affiliates have been very active in the distressed-investing arena of late. Apollo Management VI LP on July 9 filed a proposed disclosure statement and reorganization plan for plastic film and flexible packaging maker Pliant Corp. Apollo, which said in court documents it is the largest creditor in the case by virtue of the undisclosed amount of second-lien notes it holds, would inject $193 million into the company for a common equity stake; other second-lien lenders and the deficiency claim of first-lien lenders (paid otherwise through a mix of cash and new first-lien debt) would recover 17.5 cents on the dollar through cash and preferred stock or could participate in a right offering for common shares. Apollo or its majority-owned portfolio company, Berry Plastics Corp., another maker of plastics packaging and films, would own at least 55.7% of Pliant's common equity. Apollo affiliate Apollo Global Management LLC recently also became one of the three largest holders of German roofing company Monier Group GmbH as a result of a debt-for-equity swap. Apollo appears ready to perform a similar deal with decorative laminate maker Panolam Industries International Inc., which announced June 30 it had reached a preliminary agreement with holders of senior subordinated notes led by Apollo to slash $151 million in debt. Finally, Apollo reportedly could be angling to take control of the unfinished Fontainebleau Las Vegas casino resort. The Las Vegas Review-Journal cites unnamed sources that say Apollo has been buying up the debt of project owner Fontainebleau Las Vegas Holdings LLC. According to the paper, Apollo, which also owns casino giant Harrah's Entertainment Inc. with TPG Capital, may also be ready to finance the rest of the project if it can resolve a fight with lenders and access a requested $656.5 million on a $770 million revolver. (The lenders providing the revolver declared a default and refused to release funds on the loan.) A hearing on Fontainebleau's motion for partial summary judgment in the dispute was set for Monday in the U.S. Bankruptcy Court for the Southern District of Florida in Miami. - David Elman
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For The Deal readers interested, GoldenNetworking.com is hosting Distressed Investing Leaders Forum 2009 on July 29th at the World Financial Center, featuring Stephen Norris, co-founder of The Carlyle Group and currently Chairman of Gulf Cap Partners, as Keynote Speaker, on Restructuring A Distressed Company: What Does It Really Take?, and practitioners from prestigious companies such as Cedarview Capital Management LP, Jefferies & Company, Simon Development Group, Fortis Investments, Amherst Partners LLC and T5 Equity Partners, among others. More information: http://www.distressedinvestingleadersforum.com.