Private equity group Sun Capital put Albea up for sale last year with the help of investment bank Lazard and first-round bids were due in November.

Bankers are now pitching alternatives to a sale after Sun Capital struggled to agree a price with front running bidder British packaging group RPC, the sources said.

Several sources added the sale process has been called off altogether.

Around eight to ten US and European banks are set to be mandated on a refinancing shortly after a request for proposal was sent to up to 15 banks. A financing could also enable Sun Capital to realise some of its investment through a dividend payment, the sources said.

Banks are looking at providing up to US$940m-equivalent of debt financing, equating to around 5.4 times Albea’s approximate US$174m Ebitda. Net leverage would total around 4.6-4.7 times, accounting for around a turn of leverage to be cash on balance sheet, the sources said.

Debt would be in the form of a cross-border, syndicated leveraged financing, tapping both the dollar and euro markets, the sources said.

“This will be like a fresh deal for the syndicated leveraged loan market. Loans would be preferable as they dont come with restrictive non-call periods, which would be useful for the company if they still want to sell at some point,” one of the sources said.

Lazard and Sun Capital declined to comment. Albea was not immediately available to comment.

Albea attempted to issue a US$150m PIK toggle in November 2013 in order to take a dividend, but failed, according to IFR.

Albea has outstanding 2019 bonds, having raised a €245m, 8.75% senior secured bond and a US$385m, 8.375% senior secured bond, in October 2012.

(Editing by Christopher Mangham)

By Arno Schuetze and Claire Ruckin