- Conclusion of an exclusive negotiation agreement with the
Alcentra - Fidera - Atream group of investors as part of the equity
strengthening process
- Planned injection of €200M in equity and important debt
reduction in particular with the equitization of more than €550M of
debt
- Agreement in principle with major financial
creditors
Regulatory News:
As part of its equity strengthening process, Pierre et Vacances
S.A (Paris:VAC) (the "Company"), the listed holding company
of Pierre & Vacances - Center Parcs group, entered into an
exclusivity agreement on December 17, 2021 until January 31, 2022
with a group of investors consisting of (i) Alcentra Limited
(also a financial creditor of the Group), (ii) Fidera
Limited (also a financial creditor of the Group), and (iii)
Atream (also an institutional landlord of the Group) (together the
"Investors").
This exclusivity agreement follows the receipt of a binding
offer by the Investors on November 8, 2021, as amended on November
23, 2021, which was extended to January 31, 2022 in connection with
the execution of the exclusivity agreement (the "Binding
Offer").
This Binding Offer meets the Company's expectations by
preserving the Group's integrity and opening up the perspective of
a global restructuring plan. It reinforces the orientations of the
Reinvention strategic business plan.
As of the date hereof, discussions with the financial creditors
concerned have resulted in an agreement in principle reached by all
the banks and Euro PP creditors of the Company on the main elements
of the Transaction, which shall be submitted with a favourable
opinion to the formal validation of the respective committees of
the relevant parties. The Binding Offer has also already received
the agreement in principle of a number of Ornane holders
representing to date approximately 55% of the receivables held by
this category of creditors (including claims held by Alcentra and
Fidera).
The implementation of the proposed restructuring transactions
(the "Transaction") remains subject to the signature of a
final binding contractual documentation on terms acceptable to all
relevant parties, including the various creditors mentioned
above.
The Binding Offer is supported by the Company and its
management, as well as by the Group's majority shareholder,
S.I.T.I, and its founder Mr. Gérard Brémond, subject to
finalization of an agreement between the latter, S.I.T.I and the
Investors, on terms satisfactory to all relevant parties.
The completion of the Transaction would principally allow :
- the injection of €200m of equity, to strengthen the Group's
balance sheet in view of the implementation of its the Reinvention
strategic business plan (see section 7 below in this respect);
- the important reduction of the Group’s debt, with the
conversion into equity of more than €551 million of unsecured debt,
enabling the Group to return to a sustainable level of debt that is
equivalent to the one which prevailed before the health Covid
crisis;
- the implementation of a new governance structure with
shareholders ready to support the General Management in the
execution of its Reinvention strategic plan; and
- the outsourcing of the real estate business through the
creation of a dedicated real estate company to ensure the
development of new sites.
As a reminder, the Covid-19 pandemic and its restrictive
measures have severely impacted the Group's activities since the
beginning of the crisis in March 2020. In 18 months, the Group has
thus recorded a loss of nearly €800 million in revenues, €380
million in current operating income, and consumed nearly €600
million in operating cash.
In this context, and in the absence of visibility on the end of
the Covid crisis, the Group's priority was to preserve its cash
flow. As part of an amicable conciliation procedure, opened from
February 2 to November 24, 2021 (for the Company) and December 2,
2021 (for the other Group companies concerned), the Group was able
to obtain from its various financial creditors a new bridge
financing in debt for a principal amount of around 300 million
euros and to reach an agreement on the treatment of rents with
almost all of its institutional landlords and with approximately
80% of its individual landlords. As an extension of the
conciliation, the Company requested the opening of a mandat ad hoc
procedure, which was opened by order of the President of the
Commercial Court on December 14, 2021 for a period of 4 months.
The completion of the Transaction would thus constitute the
successful conclusion of the efforts made by the Group since the
beginning of this Covid crisis to ensure its sustainability and its
development.
Key elements of the Transaction
1. Transactions on the Company's share capital
Following the agreement in principle reached with the relevant
parties, the envisaged transactions on the Company's share capital
would be as follows:
(i)
after reduction of the nominal
value of the shares from €10 to €0.01 by way of a capital
reduction, a free allocation of warrants to subscribe for
shares in the Company (the "Shareholder Warrants") to
all shareholders (including S.I.T.I but excluding treasury
shares) at an exercise price of €2.75 per new share and with a
validity period of 5 years. The exercise of all the Shareholder
Warrants would enable their holders to hold approximately 7.5% of
the fully diluted share capital of the Company at the end of the
Transaction (before taking into account the dilution linked to the
allocation and conversion of the preference shares detailed below
for the benefit of the directeur général of the Group and top
management);
(ii)
a capital increase with
preferential subscription rights ("DPS") for a total gross amount
of €50,085,656, at a price of € 0.75 per new share (i.e. a
total issue of 66,780,875 new shares envisaged to date), to
be subscribed and paid up in cash, fully guaranteed by Alcentra
and Fidera. In the context of the capital increase with
preferential subscription rights, 1 preferential subscription right
would be allocated per existing share and 4 preferential
subscription rights would allow the subscription of 27 new shares
at a price of €0.75 per new share;
(iii)
a capital increase with
cancellation of the preferential subscription right for a total
gross amount of € 149,914,344 at a price of € 0.75 per new
share (i.e. a total planned issue of 199,885,792 new shares)
reserved for (a) Alcentra and Fidera for €44,957,172
each (i.e. at least 59,942,896 new shares each), (b) Atream
for €30,000,000 (i.e. 40,000.000 new shares), (c) to the Ornane
holders who wish to participate in this reserved capital
increase (in proportion to their holding of Ornane), up to a
maximum of €12,750,000 (i.e. 17,000,000 new shares), and (d) to
the holders of non-elevated Euro PP Bonds who wish to
participate in this reserved capital increase (in proportion to
their holding of Euro PP Bonds), up to €17,250,000 maximum (i.e.
23,000,000 new shares maximum). This allocation may be adjusted in
the event that a new investor approved by the Investors and by the
Group wishes to participate in the Transaction, in which case, a
portion of up to €10,000,000 may be reserved for such investor, the
total amount of the reserved capital increase remaining unchanged
in this event. The proceeds of the capital increase with
preferential subscription rights and of the reserved capital
increase would be used to repay part of the €300 million bridge
financing granted during 2021;
(iv)
a conversion of debt into
equity in an amount of approximately €551,495,311 (which should
be increased by the interest accrued at the date of conversion),
via an issuance of shares with warrants to subscribe for
shares (the "Creditors' Warrants" and, together with the
shares issued to the creditors, the "ABSA") reserved for
the creditors, and paid up by offsetting the amount of their claims
at a price of €4 per new share (i.e. a total issue envisaged to
date of approximately 137,873,828 new shares). The Creditors’
Warrants would have an exercise price of €2.25 per new share and a
validity period of 5 years. An offer to monetize the claims
held by the interested creditors could be made by certain
Investors, according to terms and conditions to be defined with the
creditors concerned, depending in particular on the total amount
whose monetization would be requested, the claims thus acquired by
the Investors being converted within the framework of the reserved
capital increase, according to the same terms and conditions as the
other creditors. The exercise of all of the Creditors’ Warrants
would enable their holders to hold approximately 7.5% of the
Group's fully diluted share capital at the end of the Transaction
(before taking into account the dilution linked to the allocation
and conversion of the preference shares detailed below for the
benefit of the directeur général of the Group and top
management);
(v)
a liquidity offer proposed by
Alcentra and Fidera under which the latter would undertake to
acquire, from all shareholders who so wish, the outstanding
preferential subscription rights in respect of the capital increase
with preferential subscription rights, for an economic value
determined on the day prior to obtaining the approval of the
Autorité des marchés financiers ("AMF") on the prospectus
relating to the Transaction. It is specified that the unit price of
the DPS offered in the context of this liquidity offer may not
exceed in any case €0.22 per DPS, corresponding to the
economic value of the DPS calculated on the basis of a closing
price of €9.16 per share on 5 November 2021. Subject to the
agreement between S. I. T. I, and Alcentra and Fidera on the one
hand, and S.I.T.I's creditors on the other hand, it is envisaged
that S. I. T. I will transfer to Alcentra and Fidera (and to them
only), in the context of this liquidity offer, all the unexercised
preferential subscription rights that it would hold in respect of
the capital increase with preferential subscription rights;
(vi)
a free allocation of warrants
to subscribe for shares in the Company (the "Guarantor
Warrants") to Alcentra and Fidera at an exercise price of
€0.01 per new share, in consideration for their undertaking to
backstop the capital increase with preferential subscription rights
and their liquidity undertaking regarding the preferential
subscription rights provided for above. The exercise of all of the
Guarantor Warrants would enable their holders to obtain a total of
approximately 7% of the Group's fully diluted share capital at the
end of the Transaction (before taking into account the dilution
linked to the allocation and conversion of the preference shares
detailed below for the benefit of the directeur général of the
Group and top management);
(vii)
a fee for structuring and
coordinating the Transaction for a total amount of €3 million,
payable by the Company and divided equally among the Investors;
(viii)
a consent fee for the benefit of
the Ornane holders and the holders of non-elevated Euro PP bonds
who would accept the Transaction and the bank creditors accepting
the Transaction who did not participate in the 2021 bridge
financing, for an amount of 1% of the relevant debt; and
(ix)
an early cash repayment of 2% of
the debt of the bondholders (i.e. the Ornane and non-elevated Euro
PP bonds holders) and bank creditors who did not participate in the
2021 bridge financing.
In connection with the Transaction, the Investors would not act
in concert.
As the Binding Offer stands, and depending on the subscription
rate of the existing shareholders to the capital increase with
preferential subscription right, the Investors, acting in this
capacity (excluding the holding of the share capital in respect of
their existing or acquired claims under their monetization offer
and to be converted in the context of the reserved capital
increase) would hold between approximately 42,6% and 56.8% 1 of the
share capital, after (i) the completion of the capital
increases (a) with preferential subscription rights and
(b) reserved for the Investors, (ii) the issuance of
the ABSA, (iii) the exercise of the Guarantor BSA and
(iv) the allocation and conversion of the first two tranches
of free shares to the benefit of Mr. Gérard Brémond (but prior to
the exercise of the Shareholder Warrants and the Creditors’
Warrants, and before taking into account the dilution related to
the allocation and conversion of the preference shares to the
benefit of the directeur général and the top management of the
Group and the third tranche of preference shares to the benefit of
Mr. Gérard Brémond).
On this same basis, and depending on their subscription rate to
the capital increase with preferential subscription rights, the
existing shareholders would hold between approximately 2.1% and
16.4% of the share capital at the end of the Transaction.
The dilution percentages will be more fully detailed at a later
date in the context of the implementation of the Transaction and
are subject to change depending on any adjustments to the terms of
the Transaction.
In this respect, the Investors will have the possibility to
request, within the framework of a good faith discussion,
adjustments to the terms of the Binding Offer (including
modifications to the subscription price of the aforementioned
capital transactions that they consider appropriate), in the event
that, in the Investors' reasonable opinion, the Group's activities
or liquidity situation would be affected by a significantly
unfavourable event or the Group's pro forma liquidity situation
would be below their assumption of a minimum liquidity level.
2. New funding reinstated
The Binding Offer, as adjusted for the elements agreed in
principle with the main financial creditors of the Company, also
provides for the implementation of the following new rescheduled
financing:
(i)
the partial reinstatement of
the bridge financing obtained in 2021 by the setting up of a senior
term loan of 174 million euros at the date of completion of the
Transaction to the benefit of the Dutch subsidiary Center Parcs
Europe N.V., as borrower. The senior term loan will have a maturity
of 5 years and will bear interest at the same rate as the bridge
financing, i.e. 3.75% per annum;
(ii)
the continuation of the
existing debt that was elevated upon implementation of the new
bridge financing in 2021 for an amount in principal of 103.5
million, which would be converted into a 5-year term loan
bearing interest at the same rate as the existing senior debt;
and
(iii)
an additional elevation for
€50 million of additional principal amount of unsecured debt
from the existing revolving credit facility and the existing
consolidated facility.
These financing facilities would be secured until their full
repayment, (a) in first rank for the term loan and
(b) in second rank for the existing and additional elevated
debt, by the establishment of a fiducie-sûreté similar to the one
set up for the 2021 bridge financing, covering all the shares of
Center Parcs Holding, a subsidiary of the Company and holding
company of the Center Parcs division, and by granting pledges on
the share of Center Parcs Holding that has not been transferred in
the fiducie-sûreté, and on the shares of the sub-subsidiaries
Center Parcs Europe NV, Center Parcs NL Holding BV, Center Parcs
Germany Holding, Center Parcs Holding Belgique and other
subsidiaries of Center Parcs Europe NV, as well as pledges on the
Center Parcs trademarks.
As the Binding Offer stands, the remaining amount of the
financial debt of the Company, i.e. around €551 million would be
converted into capital in the context of the issue of the ABSA to
the benefit of the creditors under the reserved capital increase,
in accordance with the terms and conditions specified above, which
would result, subject to the evolution of the activity, notably
linked to the Covid crisis, in the Group's net financial debt
pro forma of the Transaction being reduced to approximately 132
million euros as at 30 June 2022.
3. Preference shares
The Binding Offer provides for the implementation of a free
allocation of preference shares convertible into ordinary shares,
subject to the achievement of performance conditions for the
benefit of the General Manager (directeur général) and the top
management of the Group (excluding the Group's founder). In the
event of the achievement of all the performance conditions, and
subject, in certain cases, to customary vesting conditions, the
free preference shares could be converted into a number of ordinary
shares of the Company representing up to 3.94% of the fully diluted
share capital of the Company (after any dilution pursuant to the
Transaction).
Upon completion of the Transaction, the founder of the Group,
Mr. Gérard Brémond would enter into an employment contract with one
of the Group's entities, in addition to taking up a position in a
new real estate company, as described in section 5 below. In this
capacity, Mr. Brémond would be responsible for assisting the Group
in its transition and would therefore benefit from a separate plan
for the free allocation of preference shares convertible into
ordinary shares in three tranches, subject to performance
conditions for the last two tranches. If all applicable performance
conditions are met, the free preference shares could be converted
into a number of shares of the Company representing up to 3.7% of
the fully diluted share capital of the Company (at the end of the
Transaction but before taking into account the dilution related to
the allocation and conversion of the preference shares to the
benefit of directeur général and of the top management of the Group
as described in the previous paragraph), subject to finalization of
an agreement between Mr. Gérard Brémond, S.I.T.I and the Investors
on terms satisfactory terms for all relevant parties.
The terms and conditions of the various free shares plans for
the benefit of the directeur général and top management of the
Group and Mr. Gerard Brémond and the performance conditions, if
any, associated with them, would be further detailed at the
dedicated shareholders' meeting that would be called to vote on the
transactions on the share capital of the Company contemplated in
the context of the Transaction.
4. Governance
Following the Transaction, it is envisaged that the Company's
board of directors will be composed of 8 to 9 members (excluding
members representing employees), including (i) the Chairman
of the board of directors, (ii) Franck Gervais, the
Company's directeur général, (iii) 1 member for Alcentra
(iv) 1 member for Fidera, (v) 1 member for Atream
(who, in view of his sectoral expertise, will have the particular
objective of supervising the implementation of the Group's
industrial project), and (vi) 3 to 4 other members to be
appointed by the general meeting of shareholders.
Certain standard strategic decisions would be included in the
rules of procedure of the Board of Directors and would require
prior authorisation of the Board of Directors by an enhanced
majority of 3/4 of the members of the Board of Directors. Other
decisions would be taken by a simple majority of the members
present or represented.
Following the completion of the Transaction, four committees
would be created or maintained (Audit Committee, Appointments and
Remuneration Committee, Finance Committee and Strategic Committee).
The Group would also continue to refer to the recommendations of
the AFEP MEDEF Code in its corporate governance practices.
5. New real estate company
As part of the Transaction, a framework agreement would be
entered into relating to the development of the Group's new sites
by a real estate company dedicated to the Group, to be formed by
Atream with other institutional partners, the main purpose of which
will be to acquire and lease to the Group residences in the form of
a sale before completion (VEFA) or a lease before completion
(BEFA), as the case may be.
The provision of certain services to the above-mentioned real
estate company would be entrusted to a company to be formed in
which Mr. Gérard Brémond (or a company controlled by him) would
hold 70% of the share capital. Atream and the Group would each hold
15% of the share capital of this company.
This new company would have an asset management role on behalf
of the real estate company and its purpose would be to select and
propose to the real estate company the acquisition of tourism
assets to be leased by the Group by sourcing, arranging and
monitoring the project owners from design to delivery, and then
managing and, where applicable, selling the assets on behalf of the
real estate company. The relationship between the Group and the new
company will be governed by contracts with the Group, which would
be entered into under market conditions, on terms acceptable to
each of the relevant parties and to the Group, determined on a
transaction-by-transaction basis.
6. Conditions precedent
The Binding Offer is subject to the following conditions
precedent:
(i)
agreement between the Investors,
the Company, its financial creditors by the contractually required
majority, and S.I.T.I on the final terms of the Transaction and
conclusion of definitive contractual documentation acceptable to
all relevant parties;
(ii)
agreement between the Investors,
S.I.T.I. and S.I.T.I's own financial creditors on the terms of the
restructuring of S.I.T.I and the conclusion of definitive
contractual documentation acceptable to all relevant parties;
(iii)
obtaining (a) a decision
from the AMF to waive or not to file a mandatory public offer in
connection with the Transaction, which decision shall be free of
any appeal, and (b) a decision from the AMF approving the
Company's prospectus, including in particular the note relating to
the capital transactions contemplated in connection with the
Transaction;
(iv)
obtaining a report from an
independent expert judging the proposed price to be fair in the
context of the capital increases planned under the Transaction. In
this respect, the board of directors of the Company has already
decided to appoint Finexsi, represented by Mr. Olivier Peronnet,
upon the proposal of an ad hoc committee of four members, the
majority of whom are independent, to prepare a fairness opinion in
the context of the capital increases planned in connection with the
Transaction, in accordance with the provisions of the AMF's general
regulations; and
(v)
obtaining, if necessary, the
required authorizations under the applicable merger control
regulations.
It is specified that the acceptance of the Binding Offer by the
Group and the conclusion of the definitive and binding contractual
documentation can only occur after the information-consultation
procedures with the competent employee representative bodies within
the Group will have been finalised.
The various transactions involving the Company's share capital
will then be submitted to the vote of the Company's shareholders at
a dedicated general meeting to be held after the Group's
annual general meeting scheduled for 10 February 2022.
7. Other terms of the Binding Offer
In their Binding Offer, the Investors confirmed that they shared
the strategy set out in the Reinvention business plan presented by
the Group's management, specifying that an additional period of up
to 12 to 24 months in the achievement of the envisaged financial
objectives (€1.838m in turnover and €275m in EBITDA initially
planned for 2025) could not be ruled out in view of the current
health context. Prior to the implementation of the Transaction, an
update of the financial targets agreed between the Group and the
Investors will be communicated.
*
Subject to the finalisation of discussions and the completion of
certain conditions precedent applicable prior to or concurrently
with the signing of the contractual documentation, the objective is
to reach a definitive contractual agreement on the terms of the
Transaction by the end of January 2022. In this case, the final
completion of the Transaction would then take place several months
after the signature of the final agreement, depending on legal and
regulatory constraints. The timetable of the main steps envisaged
for the implementation of the Transaction following the signature
of a binding agreement will be communicated at a later date.
Warning
This press release and the information it contains do not
constitute an offer to sell or subscribe, or a solicitation of an
order to buy or subscribe, Pierre et Vacances S.A. securities in
Australia, Canada, Japan or the United States of America or in any
other country in which such an offer or solicitation would be
prohibited.
The dissemination, publication or distribution of this press
release in certain countries may constitute a violation of the
legal and regulatory provisions in force. Accordingly, persons
physically present in such countries and in which this press
release is disseminated, distributed or published should inform
themselves of and observe any such local restrictions. This press
release must not be disseminated, published or distributed,
directly or indirectly, in Australia, Canada, Japan or the United
States of America.
This press release is a promotional communication and does not
constitute a prospectus within the meaning of Regulation 2017/1129
of the European Parliament and of the Council of 14 June 2017 on
the prospectus to be published when securities are offered to the
public or admitted to trading on a regulated market and repealing
the Prospectus Directive 2003/71/EC (the "Prospectus
Regulation").
No communication or information relating to this transaction may
be disseminated to the public in any jurisdiction in which
registration or approval is required. No action has been taken (or
will be taken) in any jurisdiction (other than France) in which
such action would be required. The subscription to or purchase of
Pierre et Vacances S.A. shares or preferential subscription rights
may be subject to specific legal or regulatory restrictions in
certain countries. Pierre et Vacances S.A. assumes no liability for
any violation by any person of these restrictions.
With regard to the Member States of the European Economic Area
other than France, no action has been or will be taken to allow a
public offering of securities requiring the publication of a
prospectus in any of the Member States concerned. Consequently, any
offer of securities of Pierre et Vacances S.A. may only be made in
one or other of the Member States (i) to qualified investors within
the meaning of the Prospectus Regulation; or (ii) in any other case
exempting Pierre et Vacances S.A. from publishing a prospectus in
accordance with Article 1(4) of the Prospectus Regulation.
Disclaimer: Forward-Looking Statements
This press release contains certain statements that constitute
"forward-looking statements", including, without limitation,
statements that are predictions of or indicate future events,
trends, plans or objectives, based on certain assumptions and all
statements that do not directly relate to a historical fact. These
forward-looking statements are based on the management team's
current expectations and beliefs and are subject to a number of
risks and uncertainties, as a result of which actual results could
differ materially from the forecast results explicitly or
implicitly mentioned in the forward-looking statements; for more
information on these risks and uncertainties, please refer to the
documents filed by Pierre et Vacances S.A. with the Autorité des
marchés financiers.
1 Based on a subscription by the Investors of approximately
160,000,000 new shares to the reserved capital increase (i.e.
approximately €120 million) out of a total amount of
€149,914,344.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211219005091/en/
Investor Relations and Strategic Operations Emeline Lauté
+33 (0) 1 58 21 54 76 info.fin@groupepvcp.com
Press Relations Valérie Lauthier +33 (0) 6 07 36 65 10
valerie.lauthier@groupepvcp.com
Pierre & Vacances (EU:VAC)
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