Europcar closes amendment lock-up agreement with noteholders, lenders

By Sarah Lizee

Olympia, Wash., Dec. 7 – Europcar Mobility Group closed an amendment to the lock-up agreement entered into on Nov. 26 with the members of a coordinating committee representing 51.1% of the 2024 notes, 72.7% of the 2026 notes, 100% of the Credit Suisse facility, 45.7% of the revolving commitments and 22.2% of EC Finance's notes in support of a restructuring of the company’s debt.

Under the amendment, the backstop arrangements initially undertaken by the sole members of the cross-holders coordinating committee have been opened to other holders of the 2024 and 2026 notes.

The company said holders of its 2024 and 2026 senior notes have until Dec. 10 to accede to the lock-up agreement.

In addition, the subscription period with respect to new money and the revolver refinancing, as outlined below, has been extended to noon ET on Dec. 11.

The backstop commitment period will be open until noon ET on Dec. 18, extended from noon ET on Dec. 10.

Lock-up agreement terms

The agreement provides for the following:

• Full equitization of the principal amount, plus accrued interest, including the coupon due on Nov. 16, which will not be paid at the end of the 30-day grace period, of the 2024 notes;

• Full equitization of the principal amount, plus accrued interest, including the coupon due on Oct. 30, which will not be paid at the end of the 30-day grace period, of the 2026 notes;

• Full equitization of the principal amount and accrued interest of the Credit Suisse facility;

• A rights issue of €50 million with preferential subscription rights for the benefit of existing shareholders by issuance of new shares, fully backstopped in cash by the members of the cross-holders coordinating committee;

• A share capital increase of €200 million reserved to the holders of the 2024 and 2026 notes by issuance of new shares, fully backstopped in cash by the members of the cross-holders coordinating committee;

• A share capital increase of €5 million following the exercise of penny warrants;

• €225 million of new revolving fleet financing made available to the group by the holders of the 2024 and 2026 notes, maturing December 2024, fully backstopped in cash by the members of the cross-holders coordinating committee and opened to all the holders of 2024 and 2026 notes, provided they take the same pro rata share of both the senior noteholders capital increase and the €170 million revolver under a refinancing of the revolver;

• Refinancing of the €670 million revolver by granting the company a €170 million revolver opened to all the holders of 2024 and 2026 notes with an oversubscription option, and a €500 million term loan facility opened in priority to all lenders under the revolver, and then to all the holders of 2024 and 2026 notes, in each case maturing June 2023 and fully backstopped in cash by the members of the cross-holders coordinating committee;

• Penny backstop warrants No. 1 allocated to the members of the cross-holders coordinating committee as compensation for backstopping the new money in equity with a strike price of €0.01, exercisable for a period of six months and giving right to subscribe in aggregate to 4.5% of the share capital of the company on a fully diluted basis;

• Penny backstop warrants No. 2 allocated to the members of the cross-holders coordinating committee as compensation for backstopping the new fleet financing with a strike price of €0.01, exercisable for a period of six months and giving right to subscribe in aggregate to 2% of the share capital of the company on a fully diluted basis;

• Penny backstop warrants No. 3 allocated to the members of the cross-holders coordinating committee as compensation for backstopping the revolver refinancing with a strike price of €0.01, exercisable for a period of six months and giving right to subscribe in aggregate to 1.5% of the share capital of the company on a fully diluted basis;

• Penny participation warrants allocated to the lenders under the revolver and the holders of the 2024 and 2026 notes effectively participating to the revolver refinancing with a strike price of €0.01, exercisable for a period of six months and giving right to subscribe in aggregate to 1.5% of the share capital of the company on a fully diluted basis; and

• Penny coordination warrants allocated to the members of the cross-holders coordinating committee as compensation for their global coordinator role in the restructuring with a strike price of €0.01, exercisable for a period of six months and giving right to subscribe in aggregate to 1.5% of the share capital of the company on a fully diluted basis.

Holders of the 2024 and 2026 senior notes may commit to subscribe for up to their pro rata portion of the new money, provided that any holder willing to take its pro rata share in part or in full of the fleet financing new money will commit to take at least the same pro rata share in both the senior noteholders capital increase and in the €170 million revolver.

And, any holder not willing to participate in the fleet financing new money may still commit to subscribe to the senior noteholders capital increase and/or the revolver refinancing.

Europcar is a Paris-based vehicle rental services provider.

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