ORPEA Achieves a Decisive Step in the Implementation of Its Financial Restructuring: the Specialised Commercial Court of Nanterre Approves the Accelerated Safeguard Plan Proposed by the Company
24 Juli 2023 - 6:30PM
Business Wire
Regulatory News:
Following on from recent announcements concerning the
progress of its financial restructuring, ORPEA SA (the "Company")
(Paris:ORP) today announces that it has reached a major milestone
with the approval of its Accelerated Safeguard Plan (“Plan de
Sauvegarde Accélérée”) by the Nanterre Specialised Commercial
Court, by way of a cross-class cram down1.
Laurent Guillot, Chief Executive Officer,
said:
“A key milestone has now been completed, and I'm pleased about
that. We needed to move quickly, to give the most vulnerable people
back the place they deserve in our society. Last autumn, ORPEA was
a Group on the verge of bankruptcy, with almost 10 billion euros of
debt. Our objective was to save the Group, maintain employment and
guarantee the quality of care and support for the 267,000 patients
and residents we welcome into our establishments every year. Today
an essential decision has just been taken to save the company.
ORPEA's future is therefore assured, and we can look to the future
as we continue to roll out our Refoundation Plan, an ambitious plan
to serve the Group's primary mission: caring for the most
vulnerable. The Court's approval of our Accelerated Safeguard Plan
will enable new shareholders to acquire a stake in a Group that
will already have a completely different face. With their support,
we will be able to further accelerate the transformation already
underway.
Getting through these difficulties would never have been
possible throughout 2022 and 2023 without the professionalism and
commitment of our 76,000 employees: on a daily basis, they have
never stopped caring for our residents and patients. I would like
to sincerely thank them for this.”
The Accelerated Safeguard Plan, as it has been approved, is
the only solution capable of providing the financial capacity
essential to the continuation and consolidation of the actions
undertaken by the Group as part of its Refoundation. In addition to
the additional financing put in place on 26 May by the Group's main
banking partners, a number of operations will be carried out,
including capital increases aimed at settling existing debt and
raising new equity, the amendment of the terms and conditions of
the June 2022 financing to extend the maturities and reduce the
interest rate, the adjustment - by obtaining various waivers - of
the legal documentation of numerous financing agreements at
subsidiary level, and the extension of part of the Company's tax
and social liabilities.
Implementation of the conversion into equity of all ORPEA
SA’s unsecured debt, followed by cash contributions of up to €1.55
billion, will begin as soon as the final condition precedent has
been fulfilled. This consists of the purging of the appeals lodged
against the exemption from the obligation to launch a takeover bid
for ORPEA shares granted on 26 May by the Autorité des Marchés
Financiers. The relevant decision will be taken by the Paris Court
of Appeal in the last quarter of 2023.
The Company points out that these capital increases will
result in massive dilution for existing shareholders if they do not
take part. Given that the Accelerated Safeguard Plan has been
approved by means of a cross-class cram down, after these equity
transactions, and in the absence of any reinvestment, existing
shareholders would hold around 0.04% of the capital, with the
theoretical value of the share in this context being 0.02
euro.
- & -
Reminder of the terms of the various capital
transactions
The draft Accelerated Safeguard Plan proposed by the Company was
not approved by all classes of affected parties by the required
majority2. In this context, and considering that the legal
conditions had been met, by decision dated 24 July 2023, the
Specialised Commercial Court of Nanterre approved the Accelerated
Safeguard Plan by way of a cross-class cram down.
Under these conditions, the main characteristics of the capital
increases planned under the financial restructuring plan will be as
follows (for more details on the terms and conditions of these
capital increases, investors are invited to refer to the appendix
to the Company's press release dated 26 May 2023).
1. The Equitisation Capital
Increase
- Capital increase with shareholders' preferential subscription
rights, guaranteed by the Unsecured Creditors subscribing, where
applicable, by offsetting their claims
- Issue price: €0.0601 per new share3
- Number of issued shares : 64,629,157,149
- Amount (share premium included) : € 3,884,212,3453
- Percentage of ownership of existing shareholders who do not
contribute: around 0.1%
2. Groupement Capital
Increase
- Capital increase with cancellation of preferential subscription
rights reserved for named investors, for the benefit of Caisse des
Dépôts et Consignations, Mutuelle Assurance Instituteurs de France
(MAIF), CNP Assurances and MACSF Epargne Retraite (or its
affiliates) (the « Groupement »), with, a priority right for
the shareholders4
- Issue price : €0.0178 per new share
- Number of issued shares : 65,173,064,696
- Amount (share premium included) : €1,160,080,552
- Percentage of ownership of existing shareholders who do not
contribute : 0.05%
3. Rights Issue
- Rights issue, to which the members of the Groupement have
undertaken to subscribe by exercising their preferential
subscription rights, for an amount of approximately 196 million
euros, the balance, i.e. approximately 194 million euros, being
backstopped by a group of five institutions holding a significant
share of the Company’s unsecured debt (the “SteerCo”)
- Issue price: €0.0133 per new share
- Number of issued shares : 29,324,787,415
- Amount (share premium included) : €390,019,673
- Percentage of ownership of existing shareholders who do not
contribute : 0.04%
About ORPEA
ORPEA is a leading global player, expert in providing care for
all types of frailty. The Group operates in 21 countries and covers
three core businesses: care for the elderly (nursing homes,
assisted living facilities, homecare and services), post-acute and
rehabilitation care and mental health care (specialized clinics).
It has more than 76,000 employees and welcomes more than 267,000
patients and residents each year.
https://www.orpea-group.com/en
ORPEA is listed on Euronext Paris (ISIN: FR0000184798) and is a
member of the SBF 120, MSCI Small Cap Europe and CAC Mid 60
indices.
Disclaimer - forward-looking information
This press release contains forward-looking statements that
involve risks and uncertainties, including those included or
incorporated by reference, regarding the Group's future growth and
profitability that could cause actual results to differ materially
from those indicated in the forward-looking statements. These risks
and uncertainties relate to factors that the Company cannot control
or accurately estimate, such as future market conditions. The
forward-looking statements in this press release constitute
expectations of future events and should be treated as such. Actual
events or results may differ from those described in this document
due to a number of risks or uncertainties described in the
Company's 2022 Universal Registration Document, which is available
on the Company's website and on the AMF website
(www.amf-france.org).
1 As indicated in the Press Release of 13 July 2023, the Company
had requested the Court to do so by an application dated 11 July
2023. 2 As indicated in the Press Release dated 28 June 2023, among
the ten classes of affected parties, six have approved the
accelerated safeguard plan at the required majority level (more
than 2/3), three others, including the shareholders’ class, voted
the draft accelerated safeguard plan with more than 50% positive
vote, and the Convertible bond (“OCEANE”) class of affected party
voted 49% in favor of the plan. 3 This amount remains subject to
technical adjustments. 4This priority right will only benefit
shareholders existing prior to the launch of the Equitisation
Capital Increase and will therefore not benefit unsecured creditors
who may become shareholders of the Company following the
Equitisation Capital Increase.
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Investor Relations ORPEA Benoit Lesieur Investor
Relations Director b.lesieur@orpea.net
Toll-free number for shareholders : 0 805 480 480
Investor Relations NewCap Dusan Oresansky Tel: 01
44 71 94 94 ORPEA@newcap.eu
Press Relations ORPEA Isabelle Herrier-Naufle
Press Relations Director Tel: 07 70 29 53 74
i.herrier-naufle@orpea.net
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