Regulatory News:
A further new important step in the financial restructuring of
ORPEA S.A. (Paris:ORP) (the “Company”) has been achieved
with the signing of an agreement that crystallizes the commitment
of the parties to the agreement in principle announced on 1st
February (the “Agreement in Principle”) to support and
proceed with the actions required for the implementation of the
financial restructuring of the Company.
Therefore, the Company announces that it has concluded such
agreement, entitled lock-up agreement (the “Lock-Up
Agreement ”) with, on one hand, a group of French long-term
investors led by the Caisse des Dépôts et Consignations,
accompanied by CNP Assurances, and also including MAIF, accompanied
by MACSF (together the “Groupement”), and on the other hand,
the five main institutions (the “SteerCo”) coordinating a
larger group of unsecured financial creditors of ORPEA S.A.
On this occasion, the parties have reiterated their support to
the management and the Refoundation Plan of the Group, as presented
by the Company in its press release dated 15 November 2022.
The terms and conditions of the Lock-Up Agreement are common and
include, in particular, the undertaking of the signatory creditors
to support the financial restructuring of the Company in accordance
with the principles agreed in the Agreement in Principle and
accordingly, sign the required contractual documentation. These
provisions authorize the signatories, until the completion date of
the restructuring of the Company, to transfer the debt of the
Company they hold provided that the assignee is bound in the same
terms by the Lock-Up Agreement. Unsecured creditors who are not
signatories to this agreement will be able to access it under the
conditions set out in paragraph 2.
1. Details on the contemplated transactions – possibility of
transferring unsecured debt unconverted to an ad hoc
vehicle
Details on the contemplated transactions
In accordance with the provisions of the Lock-Up Agreement, the
members of the Groupement and of the SteerCo have notably
undertaken to subscribe, each as far as they are concerned, to
three successive capital increases, as the case may be in the form
of a backstop commitment, which will allow a significant reduction
in the Group’s net financial debt1.
By way of reminder, these transactions include (for more
details, see the press release published on 1 February 2023):
- The conversion in equity of the unsecured financial
indebtedness of ORPEA S.A., corresponding to a decrease of the
gross indebtedness of the Group of approximately 3.8 billion euros,
through a first capital increase with maintenance of the
preferential subscription rights of existing shareholders, of
approximately EUR 3.8 billion, guaranteed by all the unsecured
financial creditors of ORPEA S.A. who subscribe, as the case may
be, by way of set-off with their existing claims; and
- The equity injection in cash (new money equity) of EUR 1.55
billion, via two capital increases that would be subscribed by the
Groupement for around EUR 1,355 million in total, and a backstop
for the balance up to 195 million euros, provided by the
SteerCo.
As mentioned by the Company in its previous communications, the
implementation of the contemplated capital increases, which should
be completed in the course of the second semester of 2023, will
result in a massive dilution for existing shareholders, which, on
the basis of the financial parameters disclosed by the Company on
1st February 2023 and the valuation of the Company’s equity
retained by the parties for the purposes of these transactions,
would reflect issue prices significantly lower than the current
market price of ORPEA’s shares and a theoretical value of the
shares post-transactions below €0.20 per share.
In particular:
- the first capital increase of the Company2, which would lead
the existing shareholders to hold approximately 1% maximum3 of the
Company’s share capital (in the case where no existing shareholders
would subscribe thereto), would result in the issuance of
approximately 6.4 billion new shares for an issue amount of
approximately 3.8 billion euros, reflecting a theoretical issue
price for the new shares of approximately 0.59 euro per share,
- the second capital increase of the Company4, by allowing the
Groupement to hold approximately 50.2% of the Company’s share
capital, would result in the issuance of approximately 6.5 billion
new shares for an issue amount of approximately 1.16 billion euros,
reflecting a theoretical issue price of approximately 0.18 euro per
share,
- the third capital increase of the Company5, to which the
members of the Groupement undertake to subscribe on an irreducible
basis for 0.2 billion euros by exercising their preferential
subscription rights, and backstopped for the balance by members of
the SteerCo for the portion not subscribed by shareholders, as the
case may be6, as a result of which the existing shareholders would
hold approximately 0.4% maximum4 of the Company’s share capital (in
the case where no existing shareholders would subscribe to the
capital increases), with the issuance of approximately 2.9 billion
new shares for an issue amount of approximately 0.4 billion euros,
reflecting a theoretical issue price of approximately 0.13 euro per
share.
Thus, following the contemplated transactions, the existing
shareholders, if they decide not to participate in the capital
increases opened to them, would hold only about 0.4% maximum4 of
the capital of Company, while the Groupement would hold about 50.2%
of the capital of Company and the unsecured financial creditors
would hold about 49.4% of the capital of the Company.
In addition, after completion of the transactions, and on the
basis of the valuation of Company’s equity retained by the parties
for the purposes of these transactions, the unsecured financial
creditors which are parties to, or would accede to, the Lock-Up
Agreement, could recover about 30% of the nominal amount of their
claims (including the Support Fee referred to in paragraph 2
below), converted into capital as part of the first capital
increase described above.
Possibility of transferring unsecured debt unconverted to an
ad hoc vehicle
To the extent that certain unsecured financial creditors
approving the restructuring plan could not, or would decide not to
hold new shares under this first capital increase, these unsecured
financial creditors would be offered the possibility of
transferring their unsecured debt at its nominal value to an ad hoc
vehicle (special purpose vehicle - the "SPV"), in exchange
for debt instruments issued by the SPV. The SPV would subscribe to
the first capital increase, by way of conversion of the unsecured
debt transferred to the SPV, and would then hold itself shares of
the Company.
This possibility of transferring debt to the SPV will be limited
to a maximum subscription corresponding to 25 % of all unsecured
financial creditors (i.e. a principal amount of unsecured debt of
approximately EUR 942 million), it being specified that this
percentage could be increased if the members of the Groupement, the
members of the SteerCo and the Company agree on a different
percentage.
The main terms of the mandate of the SPV, which would be
specifically responsible for selling its equity stake in the
Company, would notably include provisions relating to the orderly
sale of the securities on the market or the non-transferability of
the shares for a certain period of time.
2. Accession to the Lock-Up Agreement
Creditors holding the unsecured debt of ORPEA S.A., described in
Annex 1 to this press release, will have the opportunity to accede
to the Lock-Up Agreement as of 14 February 2023 by contacting
Kroll, acting as agent for the Lock-Up (the “Agent”) (Attn:
Victor Parzyjagla and/or Thomas Choquet, orpea@is.kroll.com),
subject to compliance with the terms and conditions of the Lock-Up
Agreement.
In consideration for the undertakings made under the Lock Up
Agreement, SteerCo members and unsecured financial creditors who
have acceded to the Lock Up Agreement and accepted the terms and
conditions thereof (the “Participating Unsecured Creditors”)
will receive, under the conditions set out in the Lock-Up
Agreement, a support fee of 75 basis points calculated on the
nominal value of the relevant amounts of the unsecured debt they
hold (the “Support Fee”). This fee will be paid in cash by
the Company on or around the completion date of the financial
restructuring of ORPEA S.A.
The last accession date to accede to the
Lock-up Agreement is set at the earliest of: (i) the end of the
second Business Day (closing of the Paris Stock Exchange) before
the hearing to initiate the accelerated safeguard procedure before
the Nanterre Commercial Court and (ii) 31 March 2023 (with a
possible extension of this period subject to the prior approval of
the SteerCo Members and the Company) (the "Last Accession
Date").
It is however reminded that it is envisaged that the opening of
the accelerated safeguard procedure could happen in the coming
weeks, in which case the Last Accession Date would occur before 31
March 2023.
The procedures for accessing information relating to the
transaction for unsecured financial creditors wishing to accede to
the Lock-Up Agreement are described in Annex 2 to this press
release.
3. Next steps
The Company intends to continue its discussions with the
unsecured financial creditors who are not yet parties to the
Lock-Up Agreement in order to obtain their adherence to it, and to
present, within the deadline of the current conciliation procedure,
a request for the initiation of an accelerated safeguard procedure
in the course of March to enable the implementation of the
Agreement in Principle. The Company will keep the market informed
of the next steps of its financial restructuring7.
In parallel, the Company is continuing its discussions with its
secured bank creditors under tranches A, B and C of the June 2022
Financing Agreement in order to, in particular, finance its
Refoundation Plan and make the existing contractual documentation
compatible with its financial structure.
In addition, the Group intends to initiate discussions with the
other lenders of the Group which are parties to financing
agreements not affected by the conversion of unsecured debt into
equity, in particular in order to obtain the necessary approvals
regarding the potential change of control and to make, when
necessary, the provisions of the documentation of these existing
financings (“R1” and “R2” financial ratios in particular),
compatible with the new financial and shareholding structure of the
Group as it will be established after the implementation of the
financial restructuring plan.
* *
*
The Company confirms that information that could be qualified as
inside information within the meaning of Regulation No. 596/2014 of
16 April 2014 on market abuse and that may have been given on a
confidential basis to the various stakeholders in the context of
the negotiations has indeed been published to the market, either in
the past or in the context of this press release, with the aim of
re-establishing equal access to information relating to the Group
between the investors.
* *
*
About ORPEA
ORPEA is a leading global player, expert in the care of all
types of frailty. The Group operates in 22 countries and covers
three core businesses: care for the elderly (nursing homes,
assisted living, home care), post-acute and rehabilitation care and
mental health care (specialized clinics). It has more than 72,000
employees and welcomes more than 255,000 patients and residents
each year.
https://www.orpea-group.com/
ORPEA is listed on Euronext Paris (ISIN: FR0000184798) and is a
member of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and
CAC Mid 60 indices.
ANNEX 1
Unsecured debt of ORPEA S.A.
The unsecured debt of ORPEA S.A. whose holders are concerned by
the procedures for acceding to the Lock-Up Agreement described in
paragraph 2 of this press release includes the following debt:
Bonds
EUR 20 million 2.568% Bonds due 22 December 2022 (ISIN
FR0013080173) EUR 150 million 2.1300% Bonds due 3 July 2024 (ISIN
FR0013262987) EUR 63 million 2.200% Bonds due 15 December 2024
(ISIN FR0013301942) EUR 50 million 2.300% Bonds due 6 March 2025
(ISIN FR0013240827) EUR 400 million 2.6250% Bonds due 10 March 2025
(ISIN FR0013322187) EUR 32 million 3.1440% Bonds due 22 December
2025 (ISIN FR0013080207) EUR 77 million 2.5640% Bonds due 30
November 2027 (ISIN FR0014000T41) EUR 500 million 2.0000% Bonds due
1 April 2028 (ISIN FR0014002O10) EUR 60 million 2.71000% Bonds due
18 December 2028 (ISIN FR00140011S0) EUR 48 million 2.0000% Bonds
due 9 August 2029 (ISIN FR0014004Y16) EUR 15 million 3.0100% Bonds
due 18 December 2030 (ISIN FR00140011R2) EUR 40 million 3.0000%
Bonds due 11 August 2032 (ISIN FR0013481660) EUR 60 million 2.7500%
Bonds due 3 June 2033 (ISIN FR0014003P42) EUR 32.5 million at
3.0000% Bonds due 25 November 2041 (ISIN FR0014006MC2)
Convertible bonds
EUR 500 million Bonds convertible into new shares and/or
exchangeable for existing shares of the Company due 17 May 2027
(ISIN FR0013418795) (OCEANEs)
Unsecured bank loans
Bilateral unsecured bank loans, unionized unsecured bank loans
and unsecured credit lines underwritten by ORPEA S.A.
Partial Secured Euro PP Bonds
EUR 90 million 5.250% Bonds due 4 December 2026 (ISIN
FR0011365634), secured debt at 35% of its principal amount and
unsecured debt for the balance
Schuldschein
Schuldschein loans under German law
NSV
Namensschuldverschreibung loans under German law
ANNEX 2
Procedures for unsecured financial creditors
wishing to join the Lock-Up Agreement
Transaction website access
In order to access the documents made available on the
transaction website: https://deals.is.kroll.com/orpea, creditors
holding Bonds, Convertible Bonds and Partial Secured Euro PP Bonds
(as these terms are defined in annex 1 of this press release)
(together, the “Debt Instruments”, identified as such in
annex 1 of this press release) will need to provide a satisfactory
evidence of their holding of the Debt Instruments on the basis of a
certificate or other statement delivered by their custodian or a
prime broker acting as Direct Participant (as defined below), which
is not older than 2 days at the time they request access to the
transaction website to the Agent by email to orpea@is.kroll.com.
The Agent shall have absolute discretion as to whether creditors
holding Debt Instruments are permitted access to the transaction
website.
For creditors who are lenders, and not creditors holding Debt
Instruments, only lender of records, who appear as lender on the
register maintained by the Company or the relevant agents on its
behalf, will be given access to the transaction website.
Creditors holding Debt Instruments through Euroclear or
Clearstream
For Debt Instruments held through Euroclear or Clearstream, in
accordance with their usual procedures, Euroclear and Clearstream
will initially distribute the information related to the Lock-Up
Agreement to the direct participants of Euroclear or Clearstream
(“EC/CS Direct Participants” and, together with indirect
participants of Euroclear or Clearstream “EC/CS
Participants”). Each relevant EC/CS Direct Participant, after
receiving the information related to the Lock-Up Agreement, will
contact each creditor holding Debt Instruments, directly or through
other EC/CS Participants, with regards to such information. All
creditors holding Debt Instruments should comply with the
requirements of Euroclear or Clearstream, as applicable, and
deliver electronic instructions by the Last Accession Date to
receive the Support Fee due to them.
By submitting, or arranging for the submission of electronic
instructions in respect of the Debt Instruments, the holder of
these Debt Instruments hereby authorizes Euroclear or Clearstream
to block such Debt Instruments and maintain such Debt Instruments
blocked from the date of the relevant electronic instruction
(inclusive) until the Last Accession Date (as defined in paragraph
2 of the press release) (inclusive).
Creditors holding Debt Instruments through Euroclear France
outside Euroclear or Clearstream
For Debt Instruments held through Euroclear France, Euroclear
France will distribute the information related to the Lock-Up
Agreement to direct participants of Euroclear France (the
“Euroclear France Direct Participants” and, together with
indirect participants of Euroclear France, the “Euroclear France
Participants”), who will then send, directly or through other
Euroclear France Participants, such information to the relevant
holders of Debt Instruments. Each holder of Debt Instruments held
through Euroclear France outside Euroclear or Clearstream must
provide (if the holder is a Euroclear France Direct Participant) or
request a Euroclear France Direct Participant to provide, the
Euroclear France Direct Participant’s evidence of the aggregate
amount, in principal or units (as applicable), of the applicable
Debt Instruments blocked by a Euroclear France Direct Participant
on or before the Last Accession Date, in the form of a book entry
certificate (book entry certificate available from the Agent) from
the Euroclear France Direct Participant. Each Euroclear France
Direct Participant acting on behalf of several holders of Debt
Instruments must also provide, in the form of a spreadsheet
attached to the submitted form (spreadsheet available from the
Agent), a list of the amounts in principal amount or units of Debt
Instruments, the names, addresses, email addresses and telephone
numbers of the holders of Debt Instruments.
Lender creditors
Accessions of lenders creditors (including in particular bank
lenders or Schuldschein lenders, or more generally creditors which
are not holders of Debt Instruments) to the Lock-Up Agreement will
be validated based on the registers of lenders of record produced
by the Company or the relevant agents on its behalf as at the Last
Accession Date. Only lenders of record will be authorised to accede
to the Lock-Up Agreement.
1It is specified, with regard to unsecured financial creditors,
that only the members of the SteerCo, which are the initial
signatories of the Lock-Up Agreement, undertake to backstop the
capital increases concerned. Unsecured financial creditors who
adhere to the Lock-Up Agreement after its signature will not be
concerned by this backstop commitment. 2Capital increase with
preferential subscriptions rights of existing shareholders, for an
amount of approximately 3.8 billion euros, backstopped by all
unsecured financial creditors of ORPEA S.A., who subscribe, as the
case may be, by way of set-off with their existing claims. 3
Assuming that the shareholders, meeting as a class of affected
parties, vote in favor of the financial restructuring plan at a
two-third majority. 4Capital increase in cash without preferential
subscription rights to allow the Groupement to subscribe to it for
approximately €1.16 billion. Depending on the definitive terms of
the Plan, a priority right for initial shareholders and/or the new
shareholders could be envisaged; the parameters described could be
adjusted, as the case may be. 5 Capital increase in cash with
preferential subscription rights of existing shareholders for an
amount of approximately €0.4 billion. 6 In return for their
commitment to backstop or subscribe to the third capital increase,
a remuneration would be perceived by the SteerCo members and the
Groupement members, via the issuance of share warrants to the sole
benefit of the the SteerCo and the Groupement members (the
“Warrants”). The Warrants will give the right, to the Groupement
and the SteerCo members only, to subscribe in the aggregate to
1.45% of the capital of the Company (on a fully diluted basis) at
the exercise price of 0.01 euro per share of the Company. In the
absence of the attribution of Warrants pursuant to the conditions
set out in the Agreement in Principle, such remuneration would be
paid through an equivalent amount in cash of approximately €39
million. 7 In particular regarding the conditions (in terms of
dilution of shareholders in particular) of a potential cross-class
cram down against the shareholders, in the case where they would
not approve the plan at a 2/3 majority.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230214005432/en/
Investor Relations ORPEA Jean-Baptiste Roussille
Head of Investor Relations j-b.roussille@orpea.net
Benoit Lesieur Investor Relations Director b.lesieur@orpea.net
Toll free nb. shareholders: +33 (0) 805 480 480
Investor Relations NewCap Dusan Oresansky Tel.:
+33 (0)1 44 71 94 94 ORPEA@newcap.eu
Media Relations ORPEA Isabelle Herrier-Naufle
Media Relations Director Tel.: +33 (0)7 70 29 53 74
i.herrier-naufle@orpea.net
Image 7 Charlotte Le Barbier Tel.: +33 (0)6 78 37 27 60
clebarbier@image7.fr
Laurence Heilbronn Tel.: +33 (0)6 89 87 61 37
lheilbronn@image7.fr
Orpea (EU:ORP)
Historical Stock Chart
Von Apr 2023 bis Mai 2023
Orpea (EU:ORP)
Historical Stock Chart
Von Mai 2022 bis Mai 2023
