Carlyle this morning said it had completed a refinancing of Freeport, the European outlet mall business it bought under torturous circumstances at the top of the market.

The private equity firm said it had brought in a new investment from a Middle Eastern sovereign wealth fund to refinance Freeport, which develops and operates designer outlet malls in Europe.

Carlyle took listed company Freeport private in September 2007, but it tried to pull out of the deal before being forced to go through with it by the takeover panel.

This was at the same time as the company was engaged in a High Court battle with its former chief executive Sean Collidge; he claimed that he had not been paid a bonus that he was owed, while the company claimed that this had not been paid because he had effectively been dismissed for stealing company property.

Following the refinancing, it has also created a new entity for Freeport’s property management team, Freeport Retail, to provide specialist outsourced asset management services and is actively working with real estate investors across Europe.

Since its inception, Freeport Retail has already taken over the management of the Ringsted Outlet near Copenhagen, which is owned by TK Development AS and The Miller Group, and is making progress in signing new tenants and improving the income profile of the outlet. 

Freeport has seen significant success in its performance since its acquisition by Carlyle four years ago, growing revenues and income every year since, the company said, and the full year results for its financial year ending June 2011 have shown its best ever profitability, with a 22% increase in net income over 2010 and year- on- year growth since acquisition of over 30%. 

Iestyn Roberts, chief executive of Freeport, said “These are exciting times to be running one of Europe’s leading outlet operators.  Since Carlyle acquired Freeport, we have successfully undertaken a major turnaround and emerged from the recession in a strong position to maximise the opportunity that we currently see in the European outlet mall sector, which has shown resilience throughout the prolonged economic slowdown that has affected other areas of retail. The new Freeport Retail offer allows us to grow income for other investors using the same expertise that have seen us improve profitability at Freeport’s assets year on year for the last four years, in challenging broader economic conditions.”

Robert Hodges, managing director, Carlyle European Real Estate, said:“The new investment that we have secured for Freeport underpins its strong position in the European outlet mall sector. The firm has made great progress in improving occupancy at all centres and outperforming compared to other retail sectors. We see the creation of Freeport Retail as offering a valuable new service to capitalise on this expertise as we explore further investment opportunities across Europe.”