Press release Biocartis Group NV: Biocartis Announces Entry into
Comprehensive Recapitalization Arrangements to Strengthen Cash
Position and Support Growth
PRESS RELEASE: REGULATED INFORMATION/INSIDE
INFORMATION
1 September 2022, 07:00 CEST
Biocartis Announces
Entry
into Comprehensive
Recapitalization
Arrangements to
Strengthen Cash Position and Support Growth
Mechelen, Belgium, 1
September 2022 – Biocartis Group NV (the
"Company" or "Biocartis"), an
innovative molecular diagnostics company (Euronext Brussels:
BCART), is pleased to announce a comprehensive recapitalisation
transaction (the “Transactions”) that will provide
adequate capital to support the Company’s growth for the
foreseeable future. The Transactions are supported by key existing
investors, and are a significant milestone for the Company. The
Transactions will provide for the following:
- Deleveraging via a partial
equitization of the 4.00% convertible bonds due 2024
(“Existing Convertible Bonds”) equal to 10% of
notional amounts outstanding, and maturity extension by 3.5 years
to November 2027.
- Allow holders of the Existing
Convertible Bonds to exchange into new second lien secured
convertible bonds (“New Convertible Notes”),
subject to their commitment to participate pro-rata in a fully
backstopped EUR 25 million investment into additional New
Convertible Notes.
- Allow existing shareholders to
participate in the growth of the Company by taking part in a fully
covered rights issue of EUR 25 million, which is backstopped in
full by certain new investors and KBC Securities (subject to a
number of customary and transaction specific conditions).
- Certain existing holders of New
Convertible Notes will provide a new senior secured term loan
(“New Convertible Term Loans”) that will provide
the Company with approximately EUR 16 million of additional cash
liquidity.
The Transactions are intended to provide the
Company with approximately EUR 66 million of new money to help
manage liquidity until the Company reaches operating breakeven.
Herman Verrelst, Chief Executive Officer
of Biocartis, said: “These financing
arrangements represent a significant milestone for Biocartis. They
provide us with an opportunity to strengthen our cash position by
approximately EUR 66 million and fundamentally improve our
financial structure by pushing out the maturity date on our
convertible debt. Given the recent challenging conditions in
the financing markets, we believe these arrangements represent an
important validation of the Biocartis value proposition. Subject to
the successful completion, and upon approval by our bondholders and
shareholders, these agreements will provide the resources necessary
to continue and execute our growth strategy towards
profitability."
The Transactions are subject to the consent of
the requisite majority of the holders of the Existing Convertible
Bonds and existing shareholders of the Company, and conditional
upon equity proceeds in the fully backstopped rights offering of at
least EUR 25 million. The Company has already received binding
agreements from (i) certain holders of Existing Convertible Bonds
to fully backstop approximately EUR 41 million of capital in the
New Convertible Notes and New Convertible Term Loans, and (ii)
certain new investors and KBC Securities to backstop (subject to a
number of customary and transaction specific conditions) all of the
EUR 25 million rights issue.
The Company will call an extraordinary
shareholders' meeting and a meeting of Existing Convertible Bond to
request the necessary consents to effect the Transactions. The
Company has already received commitment from 65% of holders of
Existing Convertible Bonds. The Company believes that the
Transactions are an important milestone for the Company to secure
the financing necessary for its future growth which benefits all of
its stakeholders and therefore encourages both shareholders and
bondholders to grant the necessary consents to implement it. The
Company intends to complete the Transactions by the end of the
year.
Amendments to Existing Convertible
Bonds: The terms and conditions of the Existing
Convertible Bonds are expected to be amended to provide for, among
others, the following changes:
- 10.0% of the aggregate principal
amount will be converted into shares of the Company at the existing
conversion price of the Existing Convertible Bonds (i.e., EUR
12.8913) (the "Equitization") at (and subject to
completion of) the completion of the Transactions1.
- The maturity date will be extended
by approximately 3.5 years (to 9November 2027) if the Transactions
occur. The maturity date will remain 9 May 2024 if the Transactions
do not occur.
- Certain covenants, including the
negative pledge, will be removed to permit the refinancing.
- Remaining coupons will be paid as
Payment-In-Kind to preserve cash.
- The outstanding value of the
Existing Convertible Bonds (including principal, capitalised
interest, and accrued but uncapitalised interest) will be written
down to zero if a change of control has occurred but the
outstanding principal amount of secured debt is not paid in full in
connection with that transaction.
The Company will launch a consent solicitation
to Holders of the Existing Convertible Bonds to amend the terms of
the Existing Convertible Bonds (including the partial Equitization
of the Existing Convertible Bonds) as described above. To date,
holders of 65% of the Existing Convertible Bonds have committed to
vote in favour of such amendments. Holders of the Existing
Convertible Bonds should contact their brokers or the Company if
they have not received the relevant documentation in the coming
days.
New Convertible Term Loans:
Certain funds and accounts managed or advised by Highbridge Capital
Management LLC and funds managed or advised by Whitebox Advisors
LLC (together, the "Backstoppers") have committed
to provide New Convertible Term Loans in an amount of EUR 30.0
million, comprised of EUR 15.7 million of cash to the Company plus
EUR 13.7 million to fund the repurchase of Existing Convertible
Bonds held by the Backstoppers, plus the amount required to fund
the original issue discount of the New Convertible Term Loans. The
New Convertible Term Loans pay a coupon equal to EURIBOR plus 8.75%
(with a 1.5% floor). The New Convertible Term Loans benefit from
(a) guarantees from the Company’s wholly-owned subsidiaries
Biocartis N.V. and Biocartis US, Inc. and (b) security in the form
of senior all asset security from the Company, Biocartis N.V. and
Biocartis US, Inc. and over the shares of Biocartis N.V. and
Biocartis US, Inc. The loan is not callable by the borrower during
the first year. Thereafter, the borrower may repay in cash or force
equitize (in lieu of cash) the New Convertible Term Loans, subject
to certain conditions as described below. The New Convertible Term
Loans contain customary anti-dilution protection. If the
Transactions occur, the New Convertible Term Loans will mature on 9
August 2026. If such transactions do not occur, the New Convertible
Term Loans will mature on 15 March 2023, and the Backstoppers’ cash
commitments will be downsized to EUR 12.5 million; the Backstoppers
will automatically exchange all of their holdings in the Existing
Convertible Bonds and/or New Convertible Bonds for loans under the
New Convertible Term Loan, with such debt remaining outstanding
under and pursuant to the terms of the New Convertible Term
Loan.
Lender Equitization: At any time and at the
option of a lender, the lender may equitize the term loans at par
plus accrued interest plus option redemption payment, and converted
into freely tradable shares of the Company at a discount of 10% to
a relevant volume weighted average trading price of the Company’s
shares prior to conversion, subject to a floor set at 20% above the
price at which shares are issued in the proposed equity raise (the
"floor price"), subject to specified
adjustments.
Company Equitization: After the first year, and
to the extent the Company's share price is greater than 150% of the
floor price for five consecutive trading days, the Company may
force an equitization of certain amounts of the New Convertible
Term Loans, subject to various maximum conversion amounts.
Exchange of Existing Convertible
Bonds: Holders of the Existing Convertible Bonds will be
offered the right to participate in an exchange of Existing
Convertible Bonds for New Convertible Bonds on the following terms
and conditions:
- To be eligible for the exchange, a
holder must commit to make a pro-rata investment in the Company by
purchasing for cash its pro rata share of EUR 25 million of
additional newly issued New Convertible Bonds that are offered by
the Company (the "New Money Amount") and support
the amendment to the terms of the Existing Convertible Bonds
described above. Holders that exchange will be entitled to exchange
their Existing Convertible Bonds holdings at EUR 1.00 / EUR 1.00 of
current par value into the New Convertible Bonds (after the
Equitization, which shall only occur if the Transactions are
successful). Existing holders that do not provide additional
funding pursuant to these terms will not be permitted to exchange,
and their Existing Convertible Bonds will remain outstanding with
the amended terms (subject to the approval of the amendment of the
Existing Convertible Bonds as set out above).
- The Backstoppers have committed to
purchase any portion of the New Money Amount of additional New
Convertible Bonds that is not purchased by other holders of
Existing Convertible Bonds. In exchange for this backstop
commitment, the Backstoppers will receive a fee payable in freely
tradable shares of the Company.
Details regarding the process of the exchange of
Existing Convertible Bonds for New Convertible Bonds will be
provided to holders of Existing Convertible Bonds, and the exchange
is subject to various jurisdictional and securities-law related
limitations.
Issuance of New Convertible
Bonds: The Company will issue New Convertible Bonds which
will benefit from (a) security in the form of senior all asset
security from the Company, Biocartis N.V. and Biocartis US, Inc.
and over the shares of Biocartis N.V. and Biocartis US, Inc., and
rank junior to the New Convertible Term Loans and the existing
security, and (b) guarantees from the Company’s wholly-owned
subsidiaries Biocartis N.V. and Biocartis US, Inc. They will be
issued in an amount of up to EUR 131.5 million (depending on the
exchange participation and including the EUR 25 million upsize),
and mature in November 2026 if the Transactions herein occur and in
May 2024 if such Transactions do not occur. The New Convertible
Bonds will pay a 4.5% cash coupon semi-annually, and will be
subject to a make-whole provision. The New Convertible Bonds will
not be redeemable by the Company in the first year following their
issuance, and can only be redeemed thereafter prior to the maturity
date if the share price of the Company exceeds 150% of the
conversion price determined for the New Convertible Bonds, which
will be equal to 125% of the floor price of the New Convertible
Term Loans. The issuance of New Convertible Bonds is subject to
separate documentation and is subject to various jurisdictional and
securities-law related limitations.
Buyback of Existing Convertible Bonds
held by Backstoppers: As consideration for committing to
provide the New Convertible Term Loans the Company will repurchase
approximately 30% of the Backstoppers' holdings of Existing
Convertible Bonds (prior to the Equitization), which will be at a
discounted price of EUR82.50 per EUR100.00, if the Transactions
complete.
Advisers: Cowen and
KBC Securities are serving as financial advisors and Baker McKenzie
is serving as legal counsel to the Company.
Further implementation:
- The transactions described above
are subject to conditions and subject to finalizing additional
contractual agreements. The New Convertible Term Loans becoming
available on the terms described above are conditional on the
approval of the amendment of the terms and conditions of the
Existing Convertible Bonds, the exchange of Existing Convertible
Bonds and the issuance of New Convertible Bonds, the buyback of
Existing Convertible Bonds held by the Backstoppers, shareholder
approval and the Company’s equity raise. The Company intends to
complete the Transactions by the end of the year. The Company
intends to convene an extraordinary general shareholders' meeting
in order to approve (amongst others) (a) the conversion
feature of the New Convertible Term Loans and New Convertible
Bonds, the extended conversion of the Existing Convertible Bonds,
(b) the new equity raise, (c) the customary change of
control provisions in the New Convertible Term Loans and
instruments to be issued by the Company, and (d) the renewal
of the powers of the Company's board of directors to increase the
Company's capital pursuant to the authorised capital.
- In the event that shareholders do
not approve these requests at the shareholder's meeting, the
Transactions will not complete in full, the Company will not be
recapitalised, various fees and expenses will be paid to the
Backstoppers, certain terms of the New Convertible Terms Loans
become more restrictive, and the Company will need to consider
alternative arrangements, which may not be available on time or at
all.
--- END ---
More information:Renate DegraveHead of
Corporate Communications & Investor Relations
Biocartise-mail rdegrave@biocartis.com
tel +32 15 631
729mobile +32 471 53 60 64
About BiocartisBiocartis
(Euronext Brussels: BCART) is an innovative molecular diagnostics
(MDx) company providing next generation diagnostic solutions aimed
at improving clinical practice for the benefit of patients,
clinicians, payers and industry. Biocartis' proprietary MDx Idylla™
platform is a fully automated sample-to-result, real-time PCR
(Polymerase Chain Reaction) system that offers accurate, highly
reliable molecular information from virtually any biological sample
in virtually any setting. Biocartis is developing and marketing a
continuously expanding test menu addressing key unmet clinical
needs, with a focus in oncology, which represents the fastest
growing segment of the MDx market worldwide. Today, Biocartis
offers tests supporting melanoma, colorectal and lung cancer, as
well as for SARS-CoV-2/flu/RSV and sepsis. More information:
www.biocartis.com. Follow us on Twitter: @Biocartis_.
Biocartis and Idylla™ are registered trademarks
in Europe, the United States and other countries. The Biocartis and
Idylla™ trademark and logo are used trademarks owned by Biocartis.
Please refer to the product labeling for applicable intended uses
for each individual Biocartis product. This press release is not
for distribution, directly or indirectly, in any jurisdiction where
to do so would be unlawful. Any persons reading this press release
should inform themselves of and observe any such restrictions.
Biocartis takes no responsibility for any violation of any such
restrictions by any person. This press release does not constitute
an offer or invitation for the sale or purchase of securities in
any jurisdiction. No securities of Biocartis may be offered or sold
in the United States of America absent registration with the United
States Securities and Exchange Commission or an exemption from
registration under the U.S. Securities Act of 1933, as amended.
Forward-looking
statementsCertain statements, beliefs and opinions in this
press release are forward-looking, which reflect the Company's or,
as appropriate, the Company directors' or managements' current
expectations and projections concerning future events such as the
Company's results of operations, financial condition, liquidity,
performance, prospects, growth, strategies and the industry in
which the Company operates. By their nature, forward-looking
statements involve a number of risks, uncertainties, assumptions
and other factors that could cause actual results or events to
differ materially from those expressed or implied by the
forward-looking statements. These risks, uncertainties, assumptions
and factors could adversely affect the outcome and financial
effects of the plans and events described herein. A multitude of
factors including, but not limited to, changes in demand,
competition and technology, can cause actual events, performance or
results to differ significantly from any anticipated development.
Forward- looking statements contained in this press release
regarding past trends or activities are not guarantees of future
performance and should not be taken as a representation that such
trends or activities will continue in the future. In addition, even
if actual results or developments are consistent with the
forward-looking statements contained in this press release, those
results or developments may not be indicative of results or
developments in future periods. No representations and warranties
are made as to the accuracy or fairness of such forward-looking
statements. As a result, the Company expressly disclaims any
obligation or undertaking to release any updates or revisions to
any forward-looking statements in this press release as a result of
any change in expectations or any change in events, conditions,
assumptions or circumstances on which these forward-looking
statements are based, except if specifically required to do so by
law or regulation. Neither the Company nor its advisers or
representatives nor any of its subsidiary undertakings or any such
person's officers or employees guarantees that the assumptions
underlying such forward-looking statements are free from errors nor
does either accept any responsibility for the future accuracy of
the forward-looking statements contained in this press release or
the actual occurrence of the forecasted developments. You should
not place undue reliance on forward-looking statements, which speak
only as of the date of this press release.
Important information
This announcement is not a prospectus for the
purposes of Regulation 2017/1129, as amended (together with any
applicable implementing measures in any Member State of the
European Economic Area, the “Prospectus Regulation”) or the
Prospectus Regulation as it forms part of UK domestic law by virtue
of the UK European Union (Withdrawal) Act 2018 and as amended by
The Prospectus (Amendment etc.) (EU Exit) Regulations 2019 (each as
amended) (the "UK Prospectus Regulation").
THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA,
CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO
SO WOULD BE PROHIBITED BY APPLICABLE LAW.
THIS ANNOUNCEMENT IS FOR GENERAL INFORMATION
ONLY AND DOES NOT FORM PART OF ANY OFFER TO SELL OR PURCHASE, OR
THE SOLICITATION OF ANY OFFER TO SELL OR PURCHASE, ANY NEW BONDS,
OUTSTANDING BONDS OR OTHER SECURITIES. THE DISTRIBUTION OF THIS
ANNOUNCEMENT AND THE OFFER, SALE AND PURCHASE OF THE NEW BONDS, NEW
TERM LOANS OR THE OUTSTANDING BONDS DESCRIBED IN THIS ANNOUNCEMENT
IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. ANY PERSONS
READING THIS ANNOUNCEMENT SHOULD INFORM THEMSELVES OF AND OBSERVE
ANY SUCH RESTRICTIONS.
There shall be no offer, solicitation, sale or
purchase of the Existing Convertible Bonds, the New Convertible
Bonds, or the New Term Loans in any jurisdiction in which such
offer, solicitation, sale, or purchase would be unlawful prior to
registration, exemption from registration or qualification under
the securities laws of any such jurisdiction.
The securities referred to herein have not been
and will not be registered under the U.S. Securities Act of 1933,
as amended from time to time (the "U.S. Securities Act") or the
securities laws of any state of the United States, and may not be
offered or sold in the United States unless these securities are
registered under the U.S. Securities Act, or an exemption from the
registration requirements of the U.S. Securities Act is available.
Biocartis has not registered, and does not intend to register, any
portion of the offering of the securities concerned in the United
States, and does not intend to conduct a public offering of
securities in the United States.
This communication is only addressed to and
directed at persons in member states of the European Economic Area
(each a "Member States") and in the United Kingdom who are
"qualified investors" within the meaning of Article 2(e) of the
Prospectus Regulation and of the UK Prospectus Regulation,
respectively ("Qualified Investors").
This communication is only being distributed to
and is only directed at (i) persons who are outside the United
Kingdom or (ii) investment professionals falling within Article
19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") or (iii) high net worth
companies, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as "relevant
persons"). The securities referred to herein are only available to,
and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in only with,
relevant persons. Any person who is not a relevant person should
not act or rely on this document or any of its contents.
This announcement cannot be used as a basis for
any investment agreement or decision.
Biocartis is not liable if the aforementioned
restrictions are not complied with by any person.
1 The Backstoppers may reduce the minimum equity proceeds
required to complete the Transactions in their sole discretion
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