SRV Group Plc: SRV will defer payment of interest on its hybrid notes and repayment of principal on hybrid notes; will offer conversion of hybrid notes into new shares
SRV GROUP PLC STOCK EXCHANGE RELEASE 6 FEBRUARY 2020 8.25 EET
SRV Group Plc: SRV will defer payment of interest on its hybrid notes and repayment of principal on hybrid notes; will offer conversion of hybrid notes into new shares
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SRV Group Plc ("SRV") will defer the payment of interest on its EUR 45,000,000 subordinated fixed-rate 8.750 per cent. hybrid notes issued on 22 March 2016 (of which EUR 24.5 million is outstanding) (the "2016 Hybrid Notes") and will not repay the principal on the 2016 Hybrid Notes on the first reset date falling on 22 March 2020.
The next interest payment date of SRV's EUR 58,400,000 subordinated fixed-rate 12.0 per cent. hybrid notes issued on 23 May 2019 (the "2019 Hybrid Notes") falls on 23 May 2020 and the first reset date of the 2019 Hybrid Notes falls on 23 May 2023.
SRV's board of directors has today resolved to pursue a directed issue of new shares, in which the holders of 2016 Hybrid Notes and 2019 Hybrid Notes will be offered an opportunity to convert their 2016 Hybrid Notes and 2019 Hybrid Notes into new shares in SRV. The size of the pursued share issue would correspond to the total nominal amount of the hybrid notes and accrued interest of the 2016 Hybrid Notes and the 2019 Hybrid Notes, and would be approximately EUR 91 million. Ilmarinen Mutual Pension Insurance Company, Pohjola Insurance Ltd and OP Life Assurance Ltd as well as Pontos Ltd (a company controlled by the chairman of the board of directors of SRV, Ilpo Kokkila) have committed to SRV to subscribe for new shares in SRV with the hybrid notes in the directed share issue for an aggregate amount of approximately EUR 51 million in principal amount of the hybrid notes, and together with the accrued interest, for an aggregate amount of approximately EUR 57 million. The aforementioned commitments have been issued with the subscription price of EUR 1.05 per share. The share issue will require an authorisation by SRV's general meeting and is conditional on such authorisation. The board of directors of SRV will propose to the annual general meeting convening on 26 March 2020 that it resolve on sufficient share issue authorisations.
The next interest payment date and the first reset date of the 2016 Hybrid Notes falls on 22 March 2020. SRV will not pay interest on, or repay the principal of, the 2016 Hybrid Notes on such date. Consequently, from (and including) the first reset date to (but excluding) the final redemption of the 2016 Hybrid Notes, the 2016 Hybrid Notes will bear interest on their principal amount at a fixed rate per annum, which shall be equal to the 4-year Swap Rate (as defined in the terms and conditions of the 2016 Hybrid Notes) plus a margin of 5.00 percent per annum plus a re-offer spread of 8.819 percent per annum for each Reset Period (as defined in the terms and conditions of the 2016 Hybrid Notes), payable annually in arrears on 22 March in each year and commencing on 22 March 2021. Each amount of deferred interest shall bear interest (as if it constitutes a principal amount) at an interest rate which equals the then-current interest rate on the 2016 Hybrid Notes. Deferred interest shall not be capitalised to the principal amount of the 2016 Hybrid Notes.
SRV has today agreed with its principal lenders that no interest or principal repayments of the 2016 Hybrid Notes and 2019 Hybrid Notes may be made without the prior written consent of SRV's principal lenders, other than (i) any payment of interest which cannot be deferred, provided that such payment is funded through qualifying subordinated instruments and (ii) any payment of interest or repayment of principal, provided that such payment is funded through qualifying subordinated instruments (other than through the contemplated rights issue announced by SRV earlier today (the "Rights Issue")). Qualifying subordinated instruments include the amount of the net proceeds of the Rights Issue exceeding EUR 42,500,000, any other equity raised by SRV after the completion of the Rights Issue, and any hybrid loans or capital loans (in Finnish: pääomalaina) with a maturity date, first call date or similar falling no earlier than on 31 December 2022.
For further information, please contact:
Saku Sipola, President & CEO, tel. +358 (0)40 551 5953, saku.sipola@srv.fi
Ilkka Pitkänen, CFO, tel. +358 (0)40 667 0906, ilkka.pitkanen@srv.fi
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Nasdaq Helsinki
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www.srv.fi
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SRV in brief
SRV is a bold developer and innovator in the construction industry. We want to offer the best customer experience as a constructor of urban city centres, while also being the most attractive employer in the industry. Our genuine cooperation and enthusiasm for our work comes across in every encounter. Sustainability is reflected in all our activities.
Established in 1987, we are a publicly listed company since 2007 in Helsinki Nasdaq stock exchange that operates in selected growth centres in Finland and Russia. Our revenue in 2018 was EUR 960 million. Over 1,000 people work for us and we employ a network of almost 4,000 subcontractors in our projects.
SRV – Building for life
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This release is not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. SRV does not intend to register any part of the share issues in the United States or to conduct a public offering of securities in the United States.
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This release includes "forward-looking statements." These statements may not be based on historical facts, but are statements about future expectations. When used in this release, the words "aims," "anticipates," "assumes," "believes," "could," "estimates," "expects," "intends," "may," "plans," "should," "will," "would" and similar expressions as they relate to SRV and the transactions identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Readers should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of SRV to differ materially from those expressed or implied in the forward-looking statements. SRV or any of its affiliates, advisors or representatives or any other person undertakes no obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.