STOCKHOLM, Nov 29 (Reuters) - Private equity company Triton has appointed Deutsche Bank as financial adviser for a sale, stock market listing or debt refinancing of Swedish specialty steelmaker Ovako, sources familiar with the matter said on Tuesday.
Should Triton opt for an initial public offering or a refinancing, Swedish banks could also become involved in the deal, the sources said.
As recent wild market movements have dampened appetite for stocks and corporate debt, an IPO or a recapitalisation to allow a dividend payout seem the least likely alternatives in the immediate future.
Ovako's fortunes improved quickly after Triton took over in August last year. Triton hired Rothschild earlier this year to conduct a strategic review of the business.
It had sales of 854 million euros in the first nine months of 2011, a 40 percent increase from the same period last year, and reported an EBITDA of 114 million euros in the same period. Sales volumes were up about one-quarter in the same period.
If Ovako is valued at the same multiples as listed Swedish peer SSAB the firm would be worth around 1 billion euros. The price tag of Triton's purchase last year was not disclosed but media reports at the time put the deal at some 500 million euros.
The company could attract interest from an industrial or financial buyer. However, rocky markets and worries about the health of the global economy have made pricing difficult while financing has been harder to come by for bigger deals.
Some bankers say a quick sale of a steelmaker like Ovako could be tough.
Ebbing demand in China, the world's biggest steel consumer, and an uncertain global economy have weighed on steel orders.
Ovako said in early November it would reduce production by 15 percent at the start of next year compared with the first half of 2011 because of weaker demand in several markets.
SSAB AB has said it faced an uncertain outlook for prices and demand while Finland's Rautaruukki trimmed its sales forecast for the year due to the economic turmoil.
Ovako produces low-alloy and carbon steels in the form of bars, tubes and rings for heavy vehicle, automotive and engineering industries.
The business consists of 14 production units mainly in Sweden and Finland and 7 sales offices in Europe and North America. Ovako employs around 3,000 people.
Triton manages total investments of around 4 billion euros from Nordic and international investors.
Rothschild and Deutsche Bank both declined to comment. Ovako also declined to comment and referred to Triton, which was not available for comment. ($1 = 0.731 Euros) ($1 = 6.9347 Swedish crowns) (Reporting by Sven Nordenstam and Mia Shanley; Editing by Helen Massy-Beresford)