Scan Bidco gets OK to amend ‘working capital’ terms under 7.7% notes

By Susanna Moon

Chicago, Jan. 18 – Scan Bidco A/S obtained holder backing to amend the definition of working capital under its up to $250 million of 7.7% senior secured callable bonds due June 27, 2022 and 6.8% senior secured callable bonds due June 27, 2022 by way of written procedure.

The voting deadline was 11 a.m. ET on Jan. 17. The record date is Dec. 20.

There were enough votes to form a quorum, and the measure gained support from more than two-thirds of the votes cast, according to a notice by Nordic Trustee & Agency AB as agent.

As announced Dec. 14, the company was asking for the change because it is looking to grow its working capital in order to tender for three projects.

The potential projects have a “highly attractive risk/reward profile” and the group is likely to be awarded at least one of them, according to a previous notice.

But in order to tender for the projects and to “continue to grow with some of its most important customers,” the group needs more working capital through the extended payment terms.

“Owing to technical reasons and capital controls, it has historically been challenging for the group to move cash between certain geographies, in particular from Asia Pacific, and the group therefore is of the view that its growing working capital needs can most efficiently be met through an amendment of the definition of the WCF under the terms and conditions,” the previous release noted.

“Under the proposed amendments, any drawdown under the WCF will be measured on a net basis – deducting group-wide cash balances – rather than on a gross basis as is currently the case. The current limitation of 15% of the outstanding nominal amount will remain unchanged. It is further proposed that the maximum amount of cash that can be deducted for the purpose of calculating the net drawdown is $11 million and that the amendment to the definition of the WCF be valid, in the first instance, up to and including 30 June 2019. Several of the largest bondholders have expressed their support for the written procedure,” the release said.

In order to form a quorum, at least 20% of the adjusted nominal amount had to be represented. To pass, at least 66 2/3% of the adjusted nominal amount needed to vote in favor of the proposal.

The three projects are “above normal size, two of which are with the United Nations,” with one expected to be completed in the first half of 2019 and the two others during fiscal year 2019, the release noted.

“If awarded, either of these projects would have a material impact on the group’s revenues and EBITDA over an extended period of time,” the previous notice said.

Scan Global is a Copenhagen, Denmark-based global freight forwarder.

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