Debt and ratings

Solocal Group : Debt & Ratings

 

Bond quoted on Luxemburg Stock Exchange

(Code ISIN FR0013237484)

 

Main features of the bonds following the implementation of the plan to strengthen the 2020 financial structure

ISIN code remains unchanged : FR0013237484

 

Maturity date : extension until March 15th, 2025, with 2.5 non call years;

Interest rates (as from October, 1st, 2020):

Euribor with Euribor floor 1% + 7% spread (no less than 8%), half of which will be payable in cash, and the other half will be compounded and capitalized until December 15th, 2021;

Euribor with Euribor floor 1% + 7% (no less than 8%) payable fully in cash going forward;

Size : €168,454,208  after incorporation into the principal amount of accrued interests and unpaid coupons bond since March 15th, 2020 and cancellation and set-off of receivables carried out as part of the various share capital increases;

Face value : adjusted to  €0.5041647472146 by bond.

Main features of the Bond

New Bonds issued on 14th August 2020

(ISIN code FR0013527744)

 

Following the approval of the Amended Safeguard Plan and the approval of a conciliation protocol by the Commercial Court of Nanterre, Solocal Group issued, on 14th August 2020, a bond debt for a total amount in principal of €17,777,777, carried out with a discount of approximately 10% for a subscription amount of approximately 16 million euros.

The new bonds, which have a nominal value of one (1) euro, have substantially the same characteristics as the Bonds. The main features include notably :

  • Interest rate:
    • Euribor with Euribor floor 1% + 7% spread (no less than 8%), half of which will be payable in cash, and the other half will be compounded and capitalized until December 15th, 2021;
    • Euribor with Euribor floor 1% + 7% (no less than 8%) payable fully in cash going forward;
  • Maturity date: 15th March 2025;

Amounts due in respect of these bonds are secured by a fifth-ranking pledge of securities account relating to securities issued by Solocal SA held by Solocal Group.

Newly issued Bonds on 14th August 2020
Corporate financial ratings

- Moody's : downgrading from Caa1 to Caa3 in March 2020 along with a negative outlook, after suspension of the payment of the 2020 first quarter Bond coupon ; followed by an upgrading from Caa3 to Caa1 along with a negative outlook in October 2020 after completion of the capital increase. 

 

- Fitch Ratings : downgrading from CCC+ to C in March 2020 along with a stable outlook, after suspension of the payment of the 2020 first quarter Bond coupon  ; followed by an upgrading from C to CCC+ along with a stable outlook in October 2020 after completion of the capital increase. 

Financial ratings of the Bond

- Moody's : downgrading from Caa2 to Ca in March 2020 along with a negative outlook, after suspension of the payment of the 2020 first quarter Bond coupon; followed by an upgrading from Ca to Caa2 along with a negative outlook in October 2020 after completion of the capital increase. 

 

- Fitch Ratings : downgrading from B- to CC in March 2020, after suspension of the payment of the 2020 first quarter Bond coupon ; followed by an upgrading from CC to B-  in October 2020 after completion of the capital increase.

Financial ratings of the newly issued Bonds (14th August 2020)

- Moody's : Caa2 rating assigned, along with a stable perspective in October 2020

 

- Fitch Ratings : B- assigned in October 2020

Avis d’ajustement (French only)

Aux titulaires d’options de souscription d’actions, de bons de souscriptions d’actions (BSA), d’obligations subordonnées à options de conversion et remboursables en actions (MCB) et aux bénéficiaires de plans d’attribution d’actions de performance et de plans d’attribution gratuite d’actions (AGA)

Pour télécharger l’avis, veuillez cliquez sur le document ci-dessous

Following the completion of the financial restructuring operations carried out in 2016 and 2017, the group's financial debt had been restructured in the form of a bond issue, to the benefit of certain financial creditors of the company, for a total amount of €397,834,585, whose settlement and delivery took place on 14th March 2017 (the "Bonds" and the holder of a Bond, a "Bondholder").

In accordance with the amended accelerated financial safeguard plan approved by the Bondholders’ meeting held on 13th July 2020 and approved by a judgment of the Nanterre Commercial Court on 6th August 2020 (the "Amended Safeguard Plan"), the total principal amount of the Bonds has been increased on August 6th, 2020 from €397,834,585 to €429,329,823 by incorporating accrued interests and unpaid coupons bond since 15th March 2020 into the principal amount (including approximately €29.8 million of unpaid coupons and accrued interests and approximately €1.7 million of accrued interest between 15th September to 30th September 2020).

As part of the financial restructuring operations provided for in the Amended Safeguard Plan and decided by the general meeting of the shareholders held on 24th July, 2020, Solocal Group carried out various capital increase operations (for more details, see the company's press releases of 3rd July, 10th September, and 2nd October 2020), including a share capital increase with preferential subscription rights carried out on 6th October 2020 via the issuance of 11,198,586,929 new shares (the "New Shares") at a subscription price of €0.03 (including issuance premium), which represents an amount of €335,957,607.87 (including issuance premium) (the "Capital Increase with Preferential Subscription Rights") that was subject to certain cash and set-off subscription commitments by the Bondholders. In particular, and pursuant to the Amended Safeguard Plan, all Bondholders were required to subscribe to the New Shares not subscribed by the public and/or, pursuant to the cash subscription commitment granted by certain members of the ad hoc committee of the Bondholders, by set-off against a portion of their receivables under the Bonds.

As a result, following the completion of the various financial restructuring operations, including the Capital Increase with the Preferential Subscription Rights (and taking into account the execution of the subscription commitments by way of set-off provided for in the Amended Safeguard Plan), the total principal amount of the Bonds has been reduced to €168,454,208, corresponding to 334,125,321 Bonds with a face value of € 0.50416472146 each.

Pursuant to the Amended Safeguard Plan, the terms and conditions governing the existing Bonds are essentially as follows, in force since August 6th, 2020:

The main other features of the Bonds remain unchanged and include, notably :

The restrictions contained in the terms and conditions of the Bonds and described above could affect the group’s ability to carry out its activities and limit its ability to react to market conditions or to seize commercial opportunities that may arise. For example, such restrictions could affect the group’s ability to finance the investments of its activities, restructure its organizational structure or finance its capital needs.

In addition, the group’s ability to comply with these covenants could be affected by events that are beyond its control, such as economic, financial and industrial conditions. A breach by the group of its commitments or restrictions may result in a default under the above-mentioned agreements.

Should a default not be remedied or waived, the Bondholders may require all outstanding amounts to become immediately payable. This could activate the cross default clauses of other group loans. This type of event could have a material adverse effect for the group, leading to insolvency or liquidation of the group.

Moreover, the Group may not be able to refinance its indebtedness or obtain additional financing on satisfactory terms.

The Amended & Restated terms and conditions of the Obligations, dated 6th August 2020 adopted in application of the Amended Safeguard Plan are available here

It is specified that a Pool Factor on the Bonds has been set up at the time of the partial repayment by way of set-off that occurred on 6th October 2020 which displays the reduction of the amount in principal of each of the 334,125,321 Bonds at €0.5041647472146. 

Questions & Answers

Why is the face value by Bond of 0.5041647472146€ ?

The execution of the financial strengthening plan of the Solocal Group lead to several adjustments in the nominal of the Bonds, as described in the graph below : 

 

After completion of the transactions, the nominal of the Bonds is reduced to 168.5 million euros. Compared to the number of Bonds exchanged, the face value by Bond is 0.5041647472146 euro.

Are there the same terms & conditions for the modified Bonds & the new Bonds issued on 14th August 2020 ?

The new bonds issued on 14th August 2020, which have a nominal value of one (1) euro, have substantially the same characteristics as the Bonds. The main features include notably :

  • Interest rate:
    • Euribor with Euribor floor 1% + 7% spread (no less than 8%), half of which will be payable in cash, and the other half will be compounded and capitalized until December 15th, 2021;
    • Euribor with Euribor floor 1% + 7% (no less than 8%) payable fully in cash going forward;
  • Maturity date: 15th March 2025;

Where can I find the new terms & conditions of the Bonds ?

The Amended & Restated terms and conditions have been approved by a judgment of the Nanterre Commercial Court on 6th August 2020 in application of the Amended Safeguard Plan.

Terms & conditions are available here

I am a Debtholder & I would like to claim my new shares, following the conversion of my Bonds under the capital increase framework ?

All Debholders who haven't claimed their shares can, until 1st September 2024, notify the CEP of its status and its intention to receive the New Shares he/she is entitled to receive and that could not have been delivered directly to him/her. 

For more information on this topic, please refer to the section "Process for the Bondholders wishing to obtain the New Shares they are entitled to following the Capital Increase with Preferential Subscription Rights carried out on 6th October 2020" on the "Debt & ratings" webpage

Process for the Bondholders wishing to obtain the New Shares they are entitled to following the Capital Increase with Preferential Subscription Rights carried out on 6th October 2020:

 

At the end of the subscription period of the Capital Increase with Preferential Subscription Rights on 29th September 2020, the number of New Shares subscribed on an irreducible and reducible basis amounted to 4,763,176,572 shares, representing a subscription amount of 142.89 million euros.

Consequently, the Board of directors of the company decided, on 2nd October 2020, to implement the subscription commitments undertaken by the Bondholders in accordance with the terms of the Amended Safeguard Plan in order to request their subscription to the Capital Increase with Preferential Subscription Rights in the amount of 6,435,410,357 unsubscribed New Shares, representing a total subscription amount of €193,062,310.71 to be paid up (i) in cash for an amount of €939,609.78 (i.e. 31,320,326 New Shares) and (ii) by set-off against their receivables under the Bonds for an amount of €192,122,700.93 (i.e. 6,404,090,031 New Shares). The New Shares thereby subscribed by set-off against receivables under the Bonds have been distributed among all Bondholders in proportion of their respective holdings in the amount of the Bonds.

Pursuant to the Amended Safeguard Plan, the New Shares intended for Bondholders who did not grant, prior to 24th September 2020, any power of attorney to Glas, acting as restructuring agent, to subscribe, on their behalf, to the New Shares to be subscribed in accordance with the implementation of the subscription commitment by way of set-off (the "Defaulting Bondholders") shall be kept in the books of the Caisse des Dépôts et Consignations, under the supervision of Mr. Christophe Basse, acting as Commissaire à l’exécution du Plan de Sauvegarde Modifié (the "CEP", meaning the trustee appointed by the Commercial Court of Nanterre in charge of overseeing the implementation of the Amended Safeguard Plan).

Any Defaulting Bondholder may, until 1st September 2024, notify the CEP of its status and its intention to receive the New Shares he/she is entitled to receive and that could not have been delivered directly to him/her. To do so, such Defaulting Bondholder shall complete and return the form available here, along with the supporting documents mentioned therein, to the following addresses:

 

SELARL C Basse

Maître Christophe Basse

Email: [email protected]

+33 (0) 1 47 25 68 03

Attention: Nadia Douidi;

With a copy to :            GLAS SAS

Email: [email protected]

+33 (0)1 87 16 40 40

Attention: Aymeric Mahe / Joanne Brooks

 

After having checked the identity of the Bondholder and his/her rights with Solocal Group, the CEP will instruct the Caisse des Dépôts et Consignations to deliver the New Shares to the relevant Bondholder on the securities account provided by the latter. 

After 1st September 2024, the unallocated New Shares shall be transferred to the Company free of charge in accordance with the provisions of the Amended Safeguard Plan.

Defaulting Bonholder Request form

Document au format pdf Defaulting Bondholder Request Form_0.pdf


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