Atalian receives over 90% approval for each series in exchange offer, consent bid

By Mary-Katherine Stinson

Lexington, Ky., March 11 – La Financiere Atalian SAS announced the early consent results in its exchange offer and consent solicitation for three series of its outstanding notes, according to a notice.

As announced on Feb. 23, the exchange offer and related consent solicitation covers the following existing notes:

• 4% senior notes due May 15, 2024 (ISIN: XS1605695813, XS1605600532);

• 5 1/8% euro-denominated senior notes due May 15, 2025 (ISIN: XS1820759576, XS1820759147); and

• 6 5/8% sterling-denominated senior notes due May 15, 2025 (ISIN: XS1820760319, XS1820760079).

Atalian received valid tenders and consents from eligible holders of over 97.78% of the total principal amount of the existing notes, representing about 98.65% of the 2024 notes, 97.24% of the 2025 euro notes and 96.41% of the 2025 sterling notes.

The consents obtained reached the threshold for the implementation of the proposed 90% amendments to the existing indentures, and the supplemental 90% indentures will become effective and operative on the settlement date, upon the satisfaction of certain conditions.

Exchange consideration

Atalian is offering to exchange all of the existing notes for new senior secured notes in the amount of €836,390,831; a mandatory cash paydown in the total amount of €300 million; and an exchange offer principal repayment, payable to holders who tender their notes by the early consent deadline, in the total amount of €100 million.

The exchange consideration for each €1,000 principal amount of notes consists of the following:

• For the 2024 notes, €616.00 principal amount of new notes;

• For the euro 2025 notes, €738.30 principal amount of new notes; and

• For the sterling 2025 notes, €738.30 principal amount of new notes (or £860.78, based on a conversion rate of £0.86078 to €1).

Each non-tendering holder will be entitled to receive the same principal amount of new notes for each €1,000 of existing notes held. However, the new notes of each non-tendering holder will not be distributed on the settlement date of the exchange offer but will instead be held in trust for the benefit of those noteholders for a period of no more than 12 months following the settlement date.

On the settlement date, the issuer will apply the mandatory cash paydown to partially repay the existing notes, where €180 million will be used to partially repay the outstanding amount of the 2024 notes on a pro rata basis, and €120 million will be used to partially repay the outstanding amount of the 2025 notes on a pro rata basis.

Any holder who does not tender notes in the offer will still receive the mandatory cash paydown.

Only participating holders that submitted an exchange instruction prior to the early consent deadline will receive the exchange offer principal repayment on the settlement date.

Of the total amount of €100 million, €60 million will be payable to participating holders of 2024 notes on a pro rata basis, and €40 million will be payable to participating holders of 2025 notes on a pro rata basis.

Holders tendering their notes after the early deadline will be issued new notes and will receive the mandatory cash paydown but will not be eligible to receive the exchange offer principal repayment.

Any holder who does not tender notes in the offer will not be eligible to receive the exchange offer principal repayment.

In addition, the issuer will pay accrued interest.

Consent solicitation

In connection with the exchange offer, the issuer was also soliciting consents to amend the indentures governing the existing notes.

The proposals consist of a set of proposals requiring the receipt of consents from holders of a majority of each series (“proposed 50% amendments”) and a set of proposals requiring the receipt of consents from holders of at least 90% of each series (“proposed 90% amendments”).

Since the issuer has obtained the required 90% consents by the early consent deadline, the issuer will not effect the proposed 50% amendments.

The proposed amendments constitute a single proposal, and a participating holder must consent to the proposed amendments related to the relevant existing notes it holds as an entirety and may not consent selectively with respect to certain proposed amendments.

When the proposed 90% amendments are adopted, they will (i) remove all or substantially all of the restrictive covenants, some events of default and other obligations under the existing indentures and, among other amendments, the existing notes will no longer have the benefit of any guarantees; (ii) expressly permit any payments under, and as set out, in the exchange offer memorandum; (iii) amend the existing indentures to permit the issuer to direct the transfer of the existing notes that remain outstanding, in whole or in part, without consideration; and (iv) reduce the outstanding principal amount of, and interest rate on, the existing notes to zero, and such existing notes will be canceled, and any accrued interest will also be canceled.

The issuer also intends to apply to delist the existing notes from the GEM Stock Exchange as soon as practicable following the settlement of the exchange offer, and the issuer does not intend to list the existing notes on another stock exchange.

The entry into force of the proposed 90% amendments is not conditional upon any of the proposed 50% amendments being effected.

Holder support

The issuer had negotiated the terms of the exchange offer and consent solicitation with some noteholders who executed its lock-up agreement announced in January and, collectively with additional holders that have acceded to the lock-up agreement, hold about 98.7%, 97.4% and 99.2% of the aggregate principal amount of the outstanding 2024 notes, euro 2025 notes and sterling 2025 notes, representing in aggregate 98.20% of the outstanding principal amount of the 2025 notes for the required 50% consents and required 90% consents calculation, respectively, eligible to vote on the exchange offer and consent solicitation.

The lock-up agreement participating holders had agreed to tender all of their respective existing notes prior to the early consent deadline under the terms of the lock-up agreement. As a result, the issuer had already received support of noteholders holding over 98.48% of the outstanding aggregate principal amount of the existing notes and reached the needed consent level for the implementation of the exchange offer and consent solicitation.

However, the obligation of each of the lock-up agreement participating holders to tender their respective existing notes was subject to one or more conditions. The failure to meet such conditions could have entitled the lock-up agreement participating holders to refuse to tender their notes or withdraw any tendered notes.

In a previous release, the issuer reminded noteholders that had signed or acceded to the lock-up agreement that they had to tender their notes and consent to the proposed amendments in the exchange offer and consent solicitation in order to comply with their obligations under the lock-up agreement and to receive the lock-up fee and the exchange offer principal repayment, if applicable.

The company had offered a lock-up fee of 50 bps, as previously reported.

Timing and conditions

The early consent deadline was noon ET on March 8, which was also the withdrawal deadline.

The expiration time is noon ET on March 22.

Settlement is expected to be on March 28.

Settlement is conditioned on, among other things, holders tendering at least 90% in aggregate amount of each series of notes.

The issuer said before it proposed the exchange offer to address the upcoming maturity profile of its existing debt. The group believes the extension of the upcoming maturities addresses refinancing risks and will allow the group to concentrate on delivering recovery and value growth for all stakeholders.

Holders who are qualified institutional buyers under Rule 144A and non-U.S. person sunder Regulation S are eligible to participate in the exchange offer and consent solicitation.

The exchange and tabulation agent is Kroll Issuer Services Ltd. (atalian@is.kroll.com; +44 20 7704 0880; https://deals.is.kroll.com/atalian; attn.: Thomas Choquet and Alessandro Zorza).

Questions on financial matters related to the exchange offer and consent solicitation may be directed to Rothschild & Co (Arnaud Joubert, arnaud.joubert@rothschildandco.com; Vincent Danjoux, vincent.danjoux@rothschildandco.com) and Messier & Associes Jean-François Cizain (jfc@messier-associes.com; +44 75 8424 6178).

Other requests for information may be directed to the issuer (Alexandra Fichelson; investorcontact.fr.ags@atalianworld.com; +33 6 18 26 13 12).

Atalian is a Paris-based provider of facility management and outsourced building services.

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