A&O Shearman represents Apollo on EUR300 million financing to support KME Group’s buyback of Cunova from Paragon

The transaction encompasses three interrelated elements: the acquisition by KME of Paragon's participation in Cunova, in which KME currently holds a 45% shareholding; the transfer to Cunova of the aerospace business and foundry assets held by KME Germany GmbH, forming the "New Cunova Group"; and the refinancing of Cunova's outstanding EUR170m senior secured debt.

The financing provided by Apollo-managed funds comprises a EUR150m five-year term loan and EUR150m by way of preferred equity, together with warrants issued by the New Cunova Group. In connection with the transaction, Paragon will retain a EUR40m preferred equity interest indirectly in Cunova.

The transaction is designed to create a leading, fully integrated industrial platform in mission-critical copper-based specialty products, incorporating KME's recently developed aerospace business. 

The A&O Shearman team was led by partners Peter Banks, Annette Kurdian and Paul Dunbar, alongside partner Josh Baxter, counsel James Funder and senior associates Soyeon Lim and Hershil Kotak.