Apollo in 2021 pledged as much as $500 million in debt to Victory Park Capital, a leading investor in multiple aggregators. Victory Park, a smaller firm, for months has been seeking a buyer for one of those investments, an aggregator named Perch, in a deal that would involve offloading about $400 million in debt, according to the people familiar with the matter, who requested anonymity to discuss private negotiations.
In recent days, Victory Park appointed new board members to other Amazon aggregators they’ve backed, which the aggregators say amounts to pressure to make them buy a struggling company they don’t want.Read More: Amazon ‘Aggregators’ Who Raised $16 Billion Are Teetering Apollo and Victory Park tried to sell Perch to Berlin-based Razor Group, according to the people. Victory Park has a debt investment in Razor, which it tried to use as leverage to get it to buy Perch, but L Catterton, which has an equity stake in Razor, scuttled the deal, according to the people.
The disagreement between Apollo and L Catterton highlights the tension between debt holders and equity stakeholders in the Amazon aggregator industry as it melts down. Debt holders are generally first in line to get paid and want to recover as much principal as possible. Equity holders want the debt holders to accept a loss on principal to make the companies stronger financially and increase their value.