SRV commences written procedures to amend terms of its senior unsecured notes

SRV GROUP PLC     INSIDE INFORMATION    4 MAY 2020     10.30 EET

SRV commences written procedures to amend terms of its senior unsecured notes

SRV Group Plc (“SRV”) announced on 27 April 2020 discussions with the holders of its EUR 100,000,000 (of which EUR 62,1 million is outstanding) senior unsecured callable fixed rate notes due 23 March 2021 (the “2021 Notes”) and its EUR 75,000,000 senior unsecured callable fixed rate notes due 27 March 2022 (the “2022 Notes” and together with the 2021 Notes, the “Senior Notes”) regarding potential amendments to the terms and conditions of the Senior Notes. Today, SRV announces that it commences written procedures in respect of the Senior Notes.

The written procedures will be conducted pursuant to the terms and conditions that are described in notices of written procedure dated 4 May 2020, which are attached to this stock exchange release. The written procedures are separate for the 2021 Notes and the 2022 Notes.

In the written procedures, SRV proposes:

  • to the holders of the 2021 Notes that the maturity of the 2021 Notes be extended by one year, from March 2021 to March 2022, and to the holders of the 2022 Notes that the maturity of the 2022 Notes be extended by one and a half years, from March 2022 to September 2023;
  • changes to the call prices of the Senior Notes such that (i) at maturity, the Senior Notes would be redeemed at 101.75 per cent. of the nominal amount together with accrued but unpaid interest, (ii) up to one year prior to maturity, the Senior Notes would be redeemable at 102.75 per cent. of the nominal amount together with accrued but unpaid interest and (iii) earlier than one year prior to maturity, the Senior Notes would be redeemable at 103.75 per cent. of the nominal amount together with accrued but unpaid interest;
  • a conditional waiver in respect of the second quarter of 2020 of SRV’s undertaking relating to its adjusted equity ratio, applicable only if SRV has not received the gross proceeds of its planned rights issue on or prior to 30 June 2020;
  • certain changes to limitations on indebtedness; and
  • the addition of certain restrictions relating to repurchases or redemptions of 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) and its EUR 58,400,000 subordinated fixed-rate 12.0 per cent. hybrid notes issued on 23 May 2019.

In respect of each written procedure, if the proposed amendments are duly approved in respect of the 2021 Notes or the 2022 Notes, SRV will pay all holders of such Senior Notes an amount equal to 0.35 per cent. of the nominal amount of such Senior Notes held by each holder.

Prior to the announcement of the written procedures, discussions have been held with a group of larger institutional holders which have expressed strong support for the amendments either verbally or through the signing of voting undertakings; together, these holders represent 26 per cent. and 44 per cent. of the outstanding nominal amount in the 2021 Notes and 2022 Notes, respectively.

The proposed amendments are part of prudent measures initiated by SRV to further improve its balance sheet and available liquidity in response to the coronavirus pandemic (COVID-19). The proposed amendments will build further upon the previously announced measures in SRV’s recovery programme which includes, among other things, two contemplated share issues, announced in February. More detailed information on these measures can be found in SRV’s announcement from 6 February 2020.

Pursuant to the terms and conditions of the 2021 Notes and the 2022 Notes, respectively, quorum in respect of a written procedure only exists if holders representing at least 50 per cent. of the Adjusted Nominal Amount (as defined in the terms and conditions) reply to the written procedure. The proposed amendments pursuant to the written procedures require the consent of holders representing at least 75 per cent. of the Adjusted Nominal Amount (as defined in the terms and conditions), for which holders reply in the written procedure.

To be eligible to participate in either written procedure, a person must be a holder of 2021 Notes or 2022 Notes, respectively, at the end of the CSD Business Day (as defined in the terms and conditions) on 30 April 2020. The final deadline for submission of a valid voting form is 5 p.m. (Finnish time) on 27 May 2020, at which time the voting form must be received by the Agent (as defined in the terms and conditions) via email, post or courier delivery.

Holders of the Senior Notes are advised to read carefully the notices of written procedure for full details of, and information on, the proposed amendments and the procedures for participating in the written procedures. The notices of written procedure are attached to this stock exchange release.

If the proposed amendments are not duly approved in a written procure, the terms and conditions of such Senior Notes will remain unchanged. The written procedures are separate for the 2021 Notes and the 2022 Notes and it is possible that the proposed amendments will be approved in respect of the 2021 Notes but not the 2022 Notes, or vice versa.

SRV has mandated Pareto Securities AB as financial advisor in the written procedures in respect of its Senior Notes.

Pareto Securities AB invites investors to a conference call with SRV management on Thursday 7 May 2020 starting at 15.00 EEST in connection with the written procedure. The call will be held in English and hosted by SRV’s CEO Saku Sipola and CFO Ilkka Pitkänen.

Participants are kindly asked to register by email at events.se@paretosec.com to receive further information and dial-in details ahead of the event.

Holders of the Senior Notes are encouraged to reach out directly to Pareto Securities AB (contact details below) for more information regarding the written procedures in respect of the Senior Notes.

Attachments:

Notice of written procedure in respect of the 2021 Notes

Notice of written procedure in respect of the 2022 Notes

For further information, please contact:
Ilkka Pitkänen, CFO, Tel. +358 40 667 0906, ilkka.pitkanen@srv.fi
Carl-Johan Hugner, Head of Real Estate Investment Banking, Pareto Securities AB, Tel. +46 70 772 58 26, cjh@paretosec.com

Distribution:
Nasdaq Helsinki
Main media
www.srv.fi

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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 2019 was EUR 1,061 million. Over 1,000 people work for us and we employ a network of almost 4,000 subcontractors in our projects.

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