CVC Capital Partners is providing a €210m capital injection into tea group Lipton as it works to stabilise the business following its €4.5bn acquisition from Unilever, amid growing concerns over the company’s leveraged balance sheet and weakening trading performance, according to a report by the Financial Times.
The fresh funding is aimed at easing liquidity pressure and reducing the risk of a potential debt restructuring at the maker of PG Tips, whose debt has come under increasing strain in secondary markets. A €1.575 billion term loan linked to the company has fallen sharply in value, with trading levels dropping to around 71 cents on the euro, compared with 95 cents at the start of last year, while yields have climbed to approximately 19%.
Lipton continues to operate under a significant debt burden of about €3.2bn, which has been exacerbated by a period of high inflation, elevated interest rates, and shifting consumer preferences in key markets.
The company has also faced structural challenges in its core category. Traditional tea consumption has been gradually declining in markets such as the UK, while growth in regions including the US, China, and India has increasingly been driven by herbal and functional tea segments rather than conventional black tea formats.
Financial performance has weakened further since the carve-out from Unilever, with annual revenues falling from roughly €2bn prior to separation to €1.57bn in 2024. In the first half of 2025, revenues declined a further 13% year-on-year to just under €700m, following portfolio rationalisation and the exit of lower-margin product lines.
Credit markets have become increasingly cautious, with S&P warning in September that continued underperformance could lead to liquidity pressure or a potential restructuring within the next 12 to 18 months. Market participants have also noted that Lipton’s leverage remains significantly above typical thresholds for high-yield issuers.
Operationally, the business has undergone leadership changes and is now led by chief executive Marc Busain, who is expected to outline a turnaround plan focused on accelerating e-commerce growth, expanding higher-growth herbal tea lines, and improving operational efficiency. A shareholder update is also expected to be presented to bondholders as part of efforts to restore confidence.
Alongside the recapitalisation, CVC has appointed former Grant Reid as chair, strengthening oversight at board level.
