MAIN TRANSACTION TERMS
- Subscription price: EUR 0.0601 per new share
- Subscription ratio: 999 new shares for 1 existing
share
- Trading period for preferential subscription rights: from
November 14th to November 23rd, 2023 inclusive
- Subscription period: from November 16th to November 27th,
2023 inclusive
- Capital increase backstopped by the unsecured creditors of
the Company subscribing, if applicable, by way of set-off against
their claims
Not to be published, distributed or circulated
directly or indirectly in the United States, Canada, Australia or
Japan.
This press release is an advertisement and not
a prospectus within the meaning of Regulation (EU) 2017/1129 of the
European Parliament and of the Council of June 14, 2017
Under the Accelerated Safeguard Plan
Approved by the Specialized Commercial Court of Nanterre on July
24Th, 2023, Orpea Announces the Launch of a Share Capital Increase
With Shareholders’ Preferential Subscription Rights for an Amount
of Approximately Eur 3.9 Billion Backstopped by the Unsecured
Creditors of the Company Subscribing by Way of Set-off Against
Their Unsecured Claims
Regulatory News:
ORPEA S.A (Paris:ORP) (The « Company »), announces today
the launch of a share capital increase with shareholders’
preferential subscription rights for an amount of approximately EUR
3.9 billion (the “Equitization Capital Increase”)
The Capital Increase is carried out in the context of the
accelerated safeguard plan adopted by the Nanterre Specialised
Commercial Court on July 24th, 2023 (the “Accelerated Safeguard
Plan”) and aims at equitizing (by conversion and/or redemption)
the entire unsecured indebtedness of the Company, amounting to
approximately EUR 3.9 billion.
In a ruling handed down on November 9, 2023, the Paris Court of
Appeal rejected the appeals lodged by certain ORPEA shareholders
and minority creditors against the decision of the Autorité des
marchés financiers to grant the groupement comprising Caisse des
dépôts et consignations, CNP Assurances, MAIF and MACSF an
exemption from their obligation to file a public offer for the
Company's shares.
The Groupement having made their investment conditional on the
Paris Court of Appeal rejecting any appeal against the waiver
decision granted by the Autorité des marchés financiers, this
condition has now been met, enabling the accelerated safeguard plan
for ORPEA to continue to be implemented.
REMINDER ON THE ACCELERATED SAFEGUARD PLAN
The Accelerated Safeguard Plan, provides for the implementation
of three capital increases, namely (i) the Equitization Capital
Increase as detailed in this press release, (ii) a capital increase
without preferential subscription rights reserved to Caisse des
Dépôts et Consignations, Mutuelle Assurance Instituteurs de France
(MAIF), CNP Assurances and MACSF Epargne Retraite (or companies
affiliated with them), with a priority right granted to the
Existing Shareholders (as defined below) of the Company, allowing
them to subscribe by preference to the shares so issued, in an
amount (including the issue premium) of EUR 1,160,080,551.59, by
way of issuance of 65,173,064,696 new shares at an issue price of
EUR 0.0178 per new share (the “Groupement Capital Increase”)
and (iii) a capital increase with shareholders' preferential
subscription right in an amount (including the issue premium) of
EUR 390,019,672.62, by issuing 29,324,787,415 new shares at an
issue price of EUR 0.0133 per new share, to which the members of
the Groupement have committed to subscribe in the amount of
approximately EUR 196 million, the balance, i.e. EUR 194 million,
being backstopped by five institutions holding a significant
portion of the Company's unsecured debt (the “Rights Issue”
and together with the Equitization Capital Increase and the
Groupement Capital Increase, the “Capital Increases”, all
three Capital Increases forming an indivisible whole).
In addition, in accordance with the terms of the Accelerated
Safeguard Plan, the Company's Board of Directors decided on
November 10, 2023 to reduce the Company's share capital, based on
losses, by reducing the par value of the Company's shares from 1.25
euro to 0.01 euro per share (the "First Capital
Reduction").
The amount of the First Capital Reduction, motivated by losses
(in accordance with the provisions of article L. 225-204 of the
French Commercial Code), is 80,220,375.24 euros and has been
allocated to a special unavailable reserves account.
As a result of the First Capital Reduction, on the date of this
press release, the Company's share capital stood at 646,938.51
euros, comprising 64,693,851 shares with a par value of 0.01 euro
each.
IMPORTANT
Shareholders' attention is drawn to the fact that the
subscription price of the New Shares to be issued as part of the
Equitization Capital Increase is 3.38 times higher than the
subscription price of the new shares to be issued as part of the
Groupement Capital Increase, which stands at €0.0178 per share,
which was determined by reference to the pre-money valuation (i.e.
€1,151.6 million) retained by the parties to the Lock-Up Agreement
for all the shares comprising the Company's share capital after
completion of the Equitization Capital Increase and before issue of
the new shares under the Groupement Capital Increase.
On this basis, assuming that the post-Equitization Capital
Increase share price would be at the level of the subscription
price of the Groupement Capital Increase (i.e. €0.0178 per share),
an Existing Shareholder who decides to subscribe to the
Equitization Capital Increase by exercising his preferential
subscription rights would be exposed to a potential loss of market
value of the shares thus subscribed of 70% on the amount invested.
Existing Shareholders are therefore invited to consider carefully
whether or not to subscribe to the Equitization Capital Increase,
in view of the significant potential loss of value to which they
would be exposed.
INDEPENDENT EXPERTISE
The Company appointed on a voluntary basis the firm Sorgem
Evaluation, located at 11 rue Leroux, 75116 Paris, and represented
by Mr. Maurice Nussenbaum, as independent expert, in accordance
with Article 261-3 of the Autorité des marchés financiers’
(“AMF”) General Regulations, in order to give an opinion on
the fairness of the terms and conditions of the Company’s
restructuring from the current shareholders’ standpoint.
This independent expert’s report, together with its addendum,
provided at the Company’s request, are available in extenso, in the
Annex A of the securities note related to the Equitization Capital
Increase, with the consent of Sorgem Evaluation which has approved
its content and allowed the Company to report the conclusion of
this expertise in publicly available documents.
MAIN TERMS OF THE EQUITIZATION CAPITAL INCREASE
The Equitization Capital Increase will be carried out with
shareholders’ preferential subscription rights (the
“Rights”), pursuant to the 2nd resolution attached to the
Accelerated Safeguard Plan, and will result in the issue of
64,629,157,149 new shares (the “New Shares”), at a
subscription price of €0.0601 per New Share (i.e. EUR 0.01 nominal
value and EUR 0.0501 issue premium), to be fully paid up upon
subscription, representing gross proceeds, including the issue
premium, of EUR 3,884,212,344.65.
Each of the Company’s shareholders will receive one (1) Right
for each share registered on his securities account as of November
15th, 2023. In order to allow the registration in securities
accounts as of such date, the execution of purchases in the market
of existing shares must occur on November 13rd, 2023 at the latest.
Each Right will entitle its holder to subscribe for 999 New Shares
on an irreducible basis (à titre irréductible). Subscriptions on a
reducible basis (à titre réductible) will not be accepted.
New Shares not subscribed on an irreducible basis (à titre
irréductible) will be subscribed by the unsecured creditors under
their backstop commitment, by way of set-off against their
claims.
On the basis of the closing price of the Company share on the
regulated market of Euronext in Paris (“Euronext Paris”) on
November 9th, 2023, i.e. EUR 1.4045, the theoretical value of one
(1) Right is EUR 1.3431 and the theoretical ex-right price of the
share is EUR 0.0614.
For information purposes, the issue price reflects a discount of
2.19% compared to the theoretical value of the Company ex-right
share, calculated on the basis of the closing price on November
9th, 2023, and a discount of 95.72% compared to the closing price
on November 9th, 2023.
Investors' attention is however drawn to the fact that this
value must be considered of little relevance, in particular to the
extent that the current market price of the Company share is
significantly uncorrelated with the theoretical value of a share
post-Capital Increases. Using as a reference price the subscription
price of the Groupement Capital Increase (i.e. 0.0178€), which is
more than three times less than the issue price of the Equitization
Capital Increase (EUR 0.0601 per share), hence removing any
interest, for an Existing Shareholder (as defined hereafter), to
participate in the Equitization Capital Increase, the value of a
Right would be null.
These values do not necessarily reflect the value of the Rights
during their trading period, the ex-right price of an existing
share of the Company or the discounts, as determined in the
market.
The Equitization Capital Increase will be open to the public in
France only.
INDICATIVE TIMETABLE FOR THE EQUITIZATION CAPITAL
INCREASE
The Rights will be detached on November 14th, 2023 and tradeable
from November 14th, 2023 until November 23rd, 20231 inclusive on
the regulated market of Euronext Paris under the ISIN code
FR001400LAA6. The subscription period for the New Shares will be
open from November 16th, 2023 until close of trading on November
27th, 2023. Unexercised Rights will automatically lapse at the end
of the subscription period, i.e. on November 27th, 2023 at the
close of trading.
The issuance, settlement and delivery of the New Shares and
commencement of trading on Euronext Paris are expected to take
place on December 4th, 2023. The New Shares will immediately
entitle their holders to receive dividends declared by the Company
as from the date of issuance. They will be immediately fungible
with existing shares of the Company and will be traded on the same
trading line under the same ISIN code FR0000184798.
USE OF PROCEEDS
The estimated maximum gross proceeds of the capital increase are
approximately EUR 3.9 billion.
Any amount in cash received by the Company in respect of the
subscription by the shareholders for New Shares in the context of
the Equitization Capital Increase resulting from the exercise of
their Rights will be entirely allocated to the repayment of the
unsecured indebtedness at par and pro rata, being reminded that the
unsubscribed amount of the Equitization Capital Increase will be
entirely subscribed for by the unsecured creditors by way of
set-off against their unsecured claims.
DILUTION
The implementation of the Equitization Capital Increase, and
more broadly of the Capital increases contemplated as part of the
Accelerated Safeguard Plan, will result in a massive dilution for
the Existing Shareholders (as defined hereafter).
For illustrative purposes only, following the issue of the New
Shares, an Existing Shareholder holding (as defined hereafter) 1.0%
of the Company’s share capital on October 31st, 2023, and not
subscribing to the Equitization Capital Increase, would hold
0.0010% of the share capital.
Should Existing Shareholders (as defined hereafter) decide to
sell their preferential subscription rights received as part of the
Equitization Capital Increase and the Rights Issue, proceeds from
such sale might prove insufficient to offset the aforementioned
dilution.
Besides, Existing Shareholders willing to maintain their current
shareholding level post Capital Increases through subscription
would need to invest significant amounts to subscribe for new
shares issued, and may suffer a very significant loss in market
value of their investment, given that the issue price of the New
Shares issued through the Equitization Capital Increase (EUR 0.0601
per share) is significantly higher than the issue price of the new
shares to be issued through the Groupement Capital Increase and the
Rights Issue (EUR 0.0178 and EUR 0.0133 per share
respectively).
Illustrative example - Investments to be made by an Existing
Shareholder holding 75 Shares on November 15, 2023 and wishing to
maintain its current stake post-Capital Increases; loss of
corresponding value estimated on the basis of a share price
post-Capital Increases which would align with the theorical price
of the share post Capital Increases (EUR 0.0170).
Equitization Capital Increase
The Existing Shareholder holding 75 shares of the Company on
November 15, 2023, if it wishes not to be diluted as a result of
the Equitization Capital Increase, should subscribe to the
Equitization Capital Increase by exercising all of its Rights on an
irreducible basis for up to 74,925 New Shares, corresponding to a
total subscription price of EUR 4,503.
On this basis, and assuming that the share price after the
Equitization Capital Increase would align with the subscription
price of the Groupement Capital increase (for illustrative
purposes), the value of the shares held by the Existing Shareholder
would amount to EUR 1,335, with an investment thus corresponding to
a potential loss of market value of the shares of EUR 3,168 (-70%
of the invested amount).
Groupement Capital Increase
The Existing Shareholder having subscribed via the exercise of
all its rights to the Equitization Capital Increase, if it wishes
not to be subsequently diluted as a result of the Groupement
Capital Increase, should exercise its priority right and subscribe
on an irreducible basis to the Groupement Capital Increase up to
its full priority. The number of shares retained for the priority
right would be equal to: 75 shares (i.e. the number of shares held
on November 15, 2023) + 74,925 New Shares (i.e. the number of New
Shares subscribed as part of the Equitization Capital increase,
provided that the Existing Shareholder holds its shares in the pure
registered form on November 15, 2023) = 75,000 shares. The Existing
Shareholder could therefore place an irreducible priority
subscription order for 75,555 new shares2 issued as part of the
Groupement Capital increase, for a total subscription price of EUR
1,345.
Thus, in order to maintain its percentage of participation
unchanged following the Equitization Capital Increase and the
Groupement Capital Increase, the Existing Shareholder holding 75
shares should subscribe for 150,480 new shares in aggregate and
invest a total of EUR 5,848.
On this basis, and assuming that the share price after the
Groupement Capital Increase would align with the subscription price
of the Groupement Capital increase (for illustrative purposes), the
value of the shares held by the Existing Shareholder would amount
to EUR 2,680, corresponding to a potential loss of market value of
the shares of EUR 3,168 (-54% of the cumulative invested
amount).
Rights Issue
The Existing Shareholder having subscribed up to its full
entitlements in the Equitization Capital Increase and the
Groupement Capital Increase, if it wishes not to be subsequently
diluted as a result of the Rights Issue, should exercise all of its
preferential subscription rights on an irreducible basis for up to
33,992 new shares3 issued as part of the Rights Issue, i.e. a total
subscription price of EUR 452.
Thus, in order to maintain its percentage of interest unchanged
following the three Capital Increases, the Existing Shareholder
holding 75 shares before the launch of the Equitization Capital
Increase would have to invest a total of EUR 6,300.
On this basis, and assuming that the share price after the
Capital Increases would align with the theorical share price post
Capital Increases, i.e. EUR 0.0170 (for illustrative purposes), the
value of the securities held by the Existing Shareholder would
amount to EUR 3,132, corresponding to a potential loss of market
value of EUR 3,168 (-50% of the cumulative invested amount).
GUARANTEE / BACKSTOP COMMITMENT
The issue of the New Shares is neither guaranteed by a banking
syndicate nor underwritten.
Nonetheless, under the terms of the Safeguard Plan, the issue of
the News Shares is the subject of backstop commitments by the
unsecured creditors of the Company subscribing by way of set-off
against their claims, up to the portion of the issue that would
have not been subscribed through the exercise of Rights and in
proportion to the principal amount of unsecured debt that they hold
individually in relation to the total principal amount of unsecured
debt of the Company (rounded down to the lower integer).
These backtop commitments cover the entire issue.
These backstop commitments do not constitute a “garantie de
bonne fin” within the meaning of article L.225-145 of the French
Code de commerce
AVAILABILITY OF THE PROSPECTUS
The prospectus (the « Prospectus ») approved by the AMF
under number 23-465 on November 10, 2023 and comprised of (i) ORPEA
S.A. 2022 universal registration document filed with the AMF on
June 7, 2023 under number D. 23-0461 (the “Universal Registration
Document” or “URD”), (ii) an amendment to the URD filed with the
AMF on November 10, 2023 under number D.23-0461-A01 (the “Amendment
to the URD”), (iii) the securities note dated November 10, 2023
(the “Securities Note”) and (iv) the summary of the Prospectus
(included in the Securities Note and attached hereafter) is
available on the websites of the AMF (www.amf-france.org) and the
Company (www.orpea-group.com). Copies of the Prospectus are
available free of charge at the Company’s registered office (12,
rue Jean Jaurès, 92813 Puteaux).
Potential investors are advised to read the Prospectus before
making an investment decision in order to fully understand the
potential risks and rewards associated with the decision to invest
in the New Shares. The approval of the Prospectus by the AMF should
not be understood as an endorsement of the offer or admission to
trading on Euronext Paris of the New Shares.
RISK FACTORS
Investors’ attention is drawn to the risk factors relating to
the Company included in chapter 2 « Internal Control and Risk
Factors » of the URD as updated in chapter 2 of the Amendment to
the URD and the risk factors relating to the transaction and the
New Shares mentioned in chapter 2 “Risk Factors” of the Securities
Note, in particular risk factor 2.1 related to the massive dilution
implied by the Capital Increases and the need for Existing
Shareholders to invest significant amounts if they want to maintain
their stakes unchanged.
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/
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
This press release does not constitute an offer to sell nor a
solicitation of an offer to buy, nor shall there be any sale of
ordinary shares in any State or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.
The distribution of this document may, in certain jurisdictions,
be restricted by local legislations. Persons into whose possession
this document comes are required to inform themselves about and to
observe any such potential local restrictions.
This press release is an advertisement and not a prospectus
within the meaning of Regulation (EU) 2017/1129 of the European
Parliament and of the Council of 14 June 2017 (as amended, the
“Prospectus Regulation”). Potential investors are advised to
read the prospectus before making an investment decision in order
to fully understand the potential risks and rewards associated with
the decision to invest in the securities. The approval of the
prospectus by the AMF should not be understood as an endorsement of
the securities offered or admitted to trading on a regulated
market.
With respect to the member states of the European Economic Area
(others than France) and the United Kingdom (each a “Relevant
State”), no action has been undertaken or will be undertaken to
make an offer to the public of the securities referred to herein
requiring a publication of a prospectus in any Relevant State. As a
result, the securities may and will be offered in any Relevant
State only (i) to qualified investors within the meaning of the
Prospectus Regulation, for any investor in a Member State of the
European Economic Area, or Regulation (EU) 2017/1129 as part of
national law under the European Union (Withdrawal) Act 2018 (the
“UK Prospectus Regulation”), for any investor in the United
Kingdom, (ii) to fewer than 150 individuals or legal entities
(other than qualified investors as defined in the Prospectus
Regulation or the UK Prospectus Regulation, as the case may be), or
(iii) in accordance with the exemptions set forth in Article 1 (4)
of the Prospectus Regulation or under any other circumstances which
do not require the publication by the Company of a prospectus
pursuant to Article 3 of the Prospectus Regulation, of the UK
Prospectus Regulation and/or to applicable regulations of that
Relevant State.
The distribution of this press release has not been made, and
has not been approved, by an “authorised person” within the meaning
of Article 21(1) of the Financial Services and Markets Act 2000. As
a consequence, this press release is only being distributed to, and
is only directed at, persons in the United Kingdom that (i) are
“investment professionals” falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (as amended, the “Order”), (ii) are persons falling
within Article 49(2)(a) to (d) (“high net worth companies,
unincorporated associations, etc.”) of the Order, or (iii) are
persons to whom an invitation or inducement to engage in investment
activity (within the meaning of Article 21 of the Financial
Services and Markets Act 2000) in connection with the issue or sale
of any securities may otherwise lawfully be communicated or caused
to be communicated (all such persons together being referred to as
“Relevant Persons”). Any investment or investment activity
to which this document relates is available only to Relevant
Persons and 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 press release may not be published, distributed or
transmitted in the United States (including its territories and
dependencies). This press release does not constitute or form part
of any offer of securities for sale or any solicitation to purchase
or to subscribe for securities or any solicitation of sale of
securities in the United States. The securities referred to herein
have not been and will not be registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”) or the law of
any State or other jurisdiction of the United States, and may not
be offered or sold in the United States absent registration under
the Securities Act or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. The Company does not intend to register all or any
portion of the securities in the United States under the Securities
Act or to conduct a public offering of the securities in the United
States.
____________________________
1 Due to processing delays, custodians may
bring forward the cut-off dates and hours for receiving their
clients’ instructions in respect of their Rights. In this regard,
custodians must inform their clients through corporate event
notices and the relevant investors are invited to contact their
custodians.
2 The Existing Shareholder may subscribe
to the Groupement Capital Increase (65,173,064,696 shares to issue)
up to the share of its eligible shares in the capital of the
Company post Equitization Capital Increase, being specified that if
the exercise of the right of priority results in a number of shares
other than a whole number, then the number of shares to which this
Existing Shareholder can subscribe will be rounded down to the
lower integer. On this basis, in the example, the Existing
Shareholder will therefore be able to subscribe to
(75,000/64,693,851,000) x 65,173,064,696 = 75,555 new shares under
his priority right.
3 The Existing Shareholder will be granted
a preferential subscription right per share held, with 31
preferential subscription rights giving the right to subscribe to 7
new shares as part of the Rights Issue.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231112182178/en/
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
Investor Relations Director Tel. : 07 70 29 53 74
i.herrier-naufle@orpea.net
Image7 Charlotte Le Barbier // Laurence Heilbronn 06 78
37 27 60 – 06 89 87 61 37 clebarbier@image7.fr
lheilbronn@image7.fr
Orpea (EU:ORP)
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