European Lingerie Group AB (“ELG” and together with its subsidiaries from time to time, the “Group”) had previously announced that it has ongoing discussions with certain holders of the Bonds (the “Bondholder Committee“) and other investors to find solutions for the Group with regard to the terms and conditions (the “Terms and Conditions“) for ELG’s up to EUR 60,000,000 senior secured floating rate bonds due 2021 with ISIN SE0010831792 (the “Bonds“). Capitalised terms used but not defined herein shall have the meanings assigned to them in the Terms and Conditions.
ELG and its principal shareholders are pleased to announce that they have reached an agreement on a standstill with the Bondholder Committee (representing approximately 60 per cent of the Total Nominal Amount of the Bonds) regarding ELG’s defaults under the Terms and Conditions as well as a cooperation between the ELG and the Bondholder Committee to explore and execute a potential restructuring of the Group and the Bonds. The initial long stop date for the standstill is 30 November 2020 (the “Standstill Period”), however the Standstill Period may be extended or, if certain conditions of the standstill agreement are not met, lapse prior to such date.
It is noted that the completion of any restructuring measures agreed upon during the Standstill Period is subject to the approval of a Written Procedure to be held in accordance with the Terms and Conditions.
Provided that certain conditions are met, the Bondholder Committee has agreed to the following undertakings during the Standstill Period:
- not to instruct Intertrust (Sweden) AB (the “Agent”) to accelerate the Bonds due to ELG’s failure to (a) comply with the Maintenance Test covenant for Q3 and Q4 2019 as well as Q1 and Q2 2020, (b) pay Interest in respect of the Bonds on the Interest Payment Date for the Interest Period ending on 22 May 2020 and on 22 August 2020, (c) comply with Clause 11.1(a)(i) (Information from the Issuer) due to the fact that ELG has not timely delivered the Audited Financial Report for the financial year 2019, and (d) timely announce the intra-group transfer of shares of Felina GmbH from Felina International AG to E|L|B GmbH;
- to waive any breach of (a) Clause 13.4 (Financial Indebtedness) due to the planned additional aid loans and (b) Clause 13.8 (Negative Pledge) due to the additional security to be provided in respect of these loans.
The Bondholder Committee has also, provided that certain information is provided to them, agreed to the following undertaking during the Standstill Period (a) to waive any breach of Clause 13.6 (clean Down Period), (b) to confirm that costs related to the contemplated restructuring of the Group shall be considered an extraordinary item and be carved out as a cost from the EBITDA definition, (c) to waive any breach of the use of the Permitted Debt baskets in item “(b) Financial Leases”, “(j) Working Capital Facility” and “(o) other” of the Permitted Debt definition so that the total basket is EUR 6,000,000 but not split on items (b), (j) and (o) and (d) to waive any breach of Clause 13.8 (Negative Pledge) due to the additionally provided specific security for the aid loans.
“After lengthy negotiations with the Bondholder Committee we have finally agreed on the best way forward to resolve complex situation, caused mainly by COVID-19, with respect to the Bond obligations of the Group. We believe the best solution has been reached and we anticipate constructive cooperation to continue with the Bondholder Committee going forward. All of the Group companies are experiencing upwards trading trend currently and production has been resumed after low periods from March to June. We believe the reached Standstill Agreement is good news for all the Group, our employees, clients and suppliers, and will have no or limited impact on operations of our Group companies,’ commented Mr. Indrek Rahumaa, CEO and Board member of the Group.
This information is information that European Lingerie Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 16:30 CET on 30 July 2020.
For more information, please contact:
Diana Suprunovica
CFO
European Lingerie Group AB
+371 2839 1256
Diana.suprunovica@elg-corporate.com