TIDM20CA
RNS Number : 4611M
Arqiva Financing PLC
11 May 2020
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ARQIVA FINANCING PLC ANNOUNCE A CONSENT SOLICITATION
11 May 2020
Overview
Arqiva Financing plc (the "Issuer") today announced a consent
solicitation in respect of the following series of bonds (the
"Bonds"):
(i) GBP350,000,000 4.04 per cent. Notes due 2035 (with an
expected Maturity Date in June 2020) (ISIN: XS0895821055);
(ii) GBP400,000,000 4.882 per cent. Notes due 2032 (ISIN: XS0895820834); and
(iii) GBP164,000,000 5.340 per cent. Notes due 2037 (ISIN:
XS1024447010) (with an expected maturity date in June 2030).
Capitalised terms used in this announcement and not defined
herein have the meanings ascribed to them in the STID Proposal
Memorandum dated 11 May 2020 (the "STID Proposal Memorandum").
Background
As more fully set out in the STID Proposal, Arqiva Group Limited
(formerly Arqiva Broadcast Holdings Limited) and its subsidiaries
(together, the "Arqiva Group") have undertaken a corporate
reorganisation of the Senior Financing Group, by separating its
telecommunications towers business ("Tower Assets") from its other
businesses and consolidating the Tower Assets into an existing
entity within the Senior Financing Group, Arqiva Services Limited
("ASL") and certain subsidiaries of ASL (the "Reorganisation").
Arqiva Holdings Limited ("AHL") has entered into a share purchase
agreement with a third-party purchaser (the "Purchaser") dated 8
October 2019 (the "SPA") and has agreed, subject to the
satisfaction of certain conditions, to dispose of ASL and its
subsidiaries at completion under the SPA (the "Disposal"). The
assets not being disposed of (being all assets other than Tower
Assets) (the "Retained Assets") will remain within the Senior
Financing Group within certain existing Arqiva Group entities which
are Obligors ("NetworkCo") and, to facilitate this, ASL has,
pursuant to the Reorganisation, transferred various Retained Assets
to Arqiva Limited ("AL") (or its wholly owned subsidiaries). The
remaining business (NetworkCo) will consist of the Media Networks
business which incorporates the Terrestrial Broadcast TV and Radio,
Digital Platforms, Satellite products, as well as the Group's M2M
business. For further information in relation to NetworkCo (the
remaining business) of the Arqiva Group following the Disposal, see
the Supplementary Information to the bondholder presentation
prepared in connection with the STID Proposal, of which
Bondholders are invited to access read-only copies by
visiting
https://www.arqiva.com/documentation/credit-investors/.
AHL is an Obligor and is bound by the covenant package contained
in the Common Terms Agreement, which includes a restriction on
disposals. Pursuant to paragraph 7 (Disposals), Schedule 2 Part 2
to the Common Terms Agreement, no Obligor may enter into a single
transaction, or series of transactions to sell or otherwise dispose
of any asset or all or part of its business or undertaking without
the prior written consent of the Obligor Security Trustee, other
than Permitted Disposals.
It is in this context that Arqiva Financing No 1 Limited (the
"Borrower") is proposing the STID Proposal.
The Disposal would not fall within any of limbs (a) to (o) of
the Permitted Disposal definition, however, limb (p) of the
definition of Permitted Disposals provides for the following being
a Permitted Disposal:
"...any sale, lease, licence, transfer or other disposal
which:
(p) is a disposal made with the prior written consent of the
Obligor Security Trustee". The STID Proposal
As more fully set out in the STID Proposal and as described
above, the consent of the Obligor Security Trustee is therefore
being sought in connection with the Disposal. It is in this context
that the Borrower is proposing the STID Proposal. For detailed
information on the STID Proposal see the form of the STID Proposal
(appended at the Schedule to the STID Proposal Memorandum).
Arqiva has engaged with USPP investors and several other private
lenders to discuss the transaction. Arqiva has received broad-based
supportive feedback from these discussions and is hence confident
to proceed with announcing the STID Proposal today.
Each Bondholder shall have one vote in respect of each GBP1 of
Principal Amount Outstanding of Bonds held in respect of which the
relevant Bondholder has delivered an Electronic Voting Instruction.
All votes in favour of, and against, the STID Proposal by the
relevant Bondholders are considered on an aggregated basis,
irrespective of whether a majority of such Bondholders are in
favour of or against the STID Proposal. The aggregate Outstanding
Principal Amount of all Qualifying Debt as at the date of the STID
Proposal is approximately GBP3.2 billion.
Secured segregated proceeds account to be used for paying down
Senior Debt within Prepayment Period
In connection with the STID Proposal, and subject to the
Disposal taking place, the Borrower will undertake the
following:
(i) the Borrower will open the Segregated Proceeds Account and
shall procure that an amount equal to GBP1.779 billion (the
"Minimum Proceeds") will be deposited into the Segregated Proceeds
Account for a period of up to 180 days from the date of Disposal
(being the "Prepayment Period);
(ii) pursuant to the undertaking deed to be entered into
substantially in the form of Appendix 5 of the STID Proposal (Form
of Prepayment Undertaking Deed), the Minimum Proceeds shall be used
in full during the Prepayment Period (subject to it being permitted
that if there is a residual amount of no greater than GBP100,000,
such residual amount does not need to be so used and can be
released to the Borrower) towards the prepayment, repayment,
purchase, close-out, redemption or discharge, scheduled payments,
scheduled repayments or amortisations, as applicable, in part or in
full of one or more classes of Senior Debt (such classes and
amounts paid to such classes are to be chosen in the sole
discretion of the Borrower), together with any accrued interest
thereon, applicable Repayment Costs, swap breakage, make-whole
amounts or other associated fees and expenses; and
(iii) as more fully set out in the STID Proposal, pursuant to
the security document to be entered into substantially in the form
of Appendix 3 of the STID Proposal (Form of Segregated Proceeds
Account Security Document), the Segregated Proceeds Account will be
subject to fixed security, with such security to be released
following the satisfaction of the Prepayment Undertaking and shall
be operated by the Borrower, prior to an Obligor Enforcement Notice
being served, in accordance with the Prepayment Undertaking Deed,
which requires the Borrower to certify to the Obligor Security
Trustee that any proceeds being withdrawn are withdrawn in
compliance with the Prepayment Undertaking Deed.
Additional Covenants
In connection with the STID Proposal, and subject to the
Disposal taking place, the Borrower undertakes to enter into, and
procure entry into by the other Obligors (other than each TowerCo
Company), the additional covenants deed, substantially in the form
of Appendix 6 to the STID Proposal (Form of Additional Covenants
Deed).
For further details, Bondholders are directed to the Additional
Covenant Deed, substantially in the form of Appendix 6 to the STID
Proposal (Form of Additional Covenants Deed).
Comfort Package
As more fully set out in in Appendix 1 to the STID Proposal
(Comfort Package), among other things, the Borrower will deliver to
the Obligor Security Trustee in respect of the Disposal consent
process a certificate confirming that, as at the most recent Test
Date (being 31 December 2019), among other things, no Trigger Event
or Obligor Event of Default has occurred, after giving pro forma
effect to the Transaction, and that the Transaction is not expected
(on the basis of the Borrower's engagement with and written
confirmation from each of S&P and Fitch) to result in the
existing notes ceasing to be rated at least "BBB" or equivalent by
each of S&P and Fitch.
For detailed information on the STID Proposal see the form of
the STID Proposal (appended in the Schedule to the STID Proposal
Memorandum).
Instruction Fees
Subject to the conditions set out in the STID Proposal
Memorandum, the approval of the STID Proposal, the announcement by
the Obligor Security Trustee of such approval and the Disposal
having occurred and the Minimum Proceeds having been paid into the
Segregated Proceeds Account, the Issuer will pay to a holder of the
Bonds who has delivered a valid Electronic Voting Instruction in
respect of the STID Proposal which has been received by the
Tabulation Agent at or prior to the Instruction Fee Deadline, which
has not been validly withdrawn or revoked and which remains in full
force and effect until the announcement of the results of the STID
Proposal, the Instruction Fee equal to 0.15 per cent. of the
Principal Amount Outstanding of such Bonds the subject of the
relevant Electronic Voting Instruction. The Instruction Fee will be
paid on the Payment Date via the relevant Clearing System for
onward payment to the cash account of an eligible holder of the
Bonds in such Clearing System. The payment of any such amounts to
the relevant Clearing System will discharge the obligations of the
Issuer in respect of the Instruction Fee to all such relevant
Bondholder(s).
Holders of Bonds will not be eligible to receive the Instruction
Fee if they do not submit a valid Electronic Voting Instruction
which has been received by the Tabulation Agent at or prior to the
Instruction Fee Deadline or if they revoke their instructions after
the Instruction Fee Deadline (in the limited circumstances in which
such revocation is permitted) or their Electronic Voting
Instruction does not remain in full force and effect until the
announcement of the results of the STID Proposal by the Obligor
Security Trustee.
It is a condition to the Issuer's obligation to pay or procure
the payment of the Instruction Fee to relevant holders of Bonds
that: (i) the STID Proposal has been approved; and the Obligor
Security Trustee has announced such approval and (ii) the Disposal
has occurred and the Minimum Proceeds have been paid into the
Segregated Proceeds Account. Such condition(s) are waivable at the
discretion of the Issuer.
Expected Timetable
Event Date
Announcement and delivery of the STID Proposal. 11 May 2020
STID Proposal Memorandum and draft Implementation Documents to
be made available at the specified office of the Tabulation Agent
(copies of which are obtainable by Bondholders upon request, free
of charge).
Instruction Fee Deadline : Latest time and date for receipt of
Electronic Voting Instructions by the Tabulation Agent through the
Clearing Systems for holders to be eligible for payment of the
Instruction Fee.
Expiration Time : Latest time and date for receipt of valid
Electronic Voting Instructions by the Tabulation Agent through the
Clearing Systems.
4.00 p.m. (London time) on 20 May 2020
4.00 p.m. (London time) on 28 May 2020
STID Voting Deadline. 1 June 2020
3 June 2020 or earlier, subject to the STID Proposal, should the
Obligor Security Trustee have received votes in favour of the
STID
Proposal from
Participating Secured
Creditors representing
more than 50 per cent. of the total Outstanding Principal Amount
of Qualifying Debt.
On the Implementation Date - currently expected to occur within
two Business Days of the delivery of the notice of approval of the
STID
Event Date
Proposal and, with the
exception of the
Segregated Proceeds
Account Bank Agreement and the notice of approval of the STID
Proposal, the Implementation
Documents shall take effect from the Effective Time.
If the conditions to payment of the Instruction On the Payment Date
Fee are satisfied which is expected
Payment of the Instruction Fee to those holders to be on or about
who are eligible for payment in accordance with the tenth Business
the conditions set out in this STID Proposal Day following the
Memorandum. later of (i) STID
Proposal having
been approved and
the Obligor Security
Trustee having announced
such approval and
(ii) the occurrence
of the Disposal
and the Minimum
Proceeds having
been paid into the
Segregated
Proceeds Account.
Currently Arqiva
Financing No 1 Limited
expects the Payment
Date to be on or
around 14 July 2020.
All of the above dates are subject to earlier deadlines that may
be set by the Clearing Systems or any intermediary.
General
Subject to applicable law and as provided herein, the Issuer
may, in its sole discretion, amend the terms of (including the
extension or amendment of any of the deadlines relating to the STID
Proposal Consent Solicitation), terminate or withdraw the STID
Proposal Consent Solicitation at any time up to the Solicitation
Amendment Deadline.
Bondholders are advised to check with the bank, securities
broker, trust company, custodian, Clearing System or other
intermediary through which they hold their Bonds whether such
intermediary will apply
different deadlines for participation to those set out in the
STID Proposal Memorandum and, if so, should adhere to such
deadlines if such deadlines are prior to the deadlines set out in
the STID Proposal Memorandum.
In relation to the delivery or revocation of Electronic Voting
Instructions, in each case, through the Clearing Systems,
Bondholders holding Bonds in Euroclear or Clearstream, Luxembourg
should note the particular practice of the relevant Clearing
System, including any earlier deadlines set by such Clearing
System.
Only direct accountholders in Euroclear or Clearstream,
Luxembourg may deliver Electronic Voting Instructions. Bondholders
who are not direct accountholders in Euroclear or Clearstream,
Luxembourg should arrange for the accountholder through which they
hold their Bonds to deliver an Electronic Voting Instruction on
their behalf to the relevant Clearing System as more particularly
described in the STID Proposal Memorandum. The deadlines specified
by the relevant Clearing System may be earlier than the Expiration
Time.
Bondholders are advised to read carefully the STID Proposal
Memorandum for full details of and information on the procedures
for participating in the STID Proposal Consent Solicitation.
A complete description of the terms and conditions of the STID
Proposal Consent Solicitation will be set out in the STID Proposal
Memorandum. Bondholders are invited to access read-only copies of
an investor presentation prepared in connection with the STID
Proposal by visiting
https://www.arqiva.com/documentation/credit-investors/.
For Further Information:
Further details on the STID Proposal Consent Solicitation can be
obtained from:
The Solicitation Agents
Banco Santander, S.A.
2 Triton Square
Regent's Place
London NW1 3AN
United Kingdom
Telephone: +44 7418 709 688 / +44 7742 403 679
Email: tommaso.grospietro@santandercib.co.uk / adam.crocker@santandercib.co.uk
Attention: Liability Management
Merrill Lynch International
2 King Edward Street
London EC1 1HQ
United Kingdom
Telephone: +44 (0) 20 7996 5420
Email: DG.LM-EMEA@bofa.com
Attention: Liability Management Group
Further details on the STID Proposal Consent Solicitation and
copies of the STID Proposal Memorandum can be obtained from:
The Tabulation Agent
Lucid Issuer Services Limited
Tankerton Works
12, Argyle Walk
London WC1H 8HA
Telephone: +44 20 7704 0880
Email: arqiva@lucid-is.com
Attention: Oliver Slyfield/David Shilson
Website: https://portal.lucid-is.com/deals/arqiva/library
Disclaimer
This announcement must be read in conjunction with the STID
Proposal Memorandum. The STID Proposal Memorandum contains
important information which should be read carefully before any
decision is made with respect to the STID Proposal Consent
Solicitation. If any Bondholder is in doubt as to the action it
should take, it is recommended to seek its own financial, legal or
other advice, including as to any tax consequences, from its
stockbroker, bank manager, solicitor, accountant, independent
financial adviser authorised under the Financial Services and
Markets Act 2000 (if in the United Kingdom) or other appropriately
authorised financial adviser. Any individual or company whose Bonds
are held on its behalf by a broker, dealer, bank, custodian, trust
company or other nominee must contact such entity if it wishes to
participate in the STID Proposal Consent Solicitation. This
announcement is issued by Arqiva Financing plc. None of the
Solicitation Agents, the Tabulation Agent, the Obligor Security
Trustee or the Bond Trustee accepts any responsibility for the
contents of this announcement.
This announcement is released by Arqiva Financing plc and
contains inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing
information relating to the proposals described above. For the
purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055, this announcement is made by Jeremy Mavor
(Secretary) at Arqiva Financing plc.
Legal Entity Identifier number:
Arqiva Financing plc- 213800HHECW72RW2QH41
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCGRGDUBBBDGGB
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