Solocal weighs two offers in restructuring process, leans toward Ycor

Chicago, March 20 – Solocal Group has two offers under review to effect a restructuring, each proposing a debt reduction and a cash injection.

The company’s debt includes €176,689,767.06 in bonds with interest at Euribor plus 700 basis points (with a 1% Euribor floor) due March 15, 2025 (ISIN: FR0013237484), €18,743,702.88 of mini bonds with interest at Euribor plus 700 bps (with a 1% Euribor floor) due March 15, 2025 (ISIN: FR0013527744) and a revolving credit agreement for €34 million.

The company had a waiver on interest through Feb. 29, which is no longer in effect. The company owes €15.6 million in interest, which it has not paid.

Plan A

The company has an offer from its bondholders providing new money in the form of debt.

The most recent offer from bondholders was submitted on Feb. 12.

Bondholders would contribute a new money financing for €20 million in the form of new debt that could potentially be increased.

The offer includes a partial repayment in cash of part of the senior debt, but lower than the amount repaid under the other Ycor offer.

Under the plan, the group’s existing debt would be massively reduced, including the entirety of the bonds, with different amortization profiles depending on the nature of the reinstated debt.

Plan B

Concurrently, the company initiated a search for an industrial partner or potential buyer alongside discussions with its financial creditors.

Industrial player Ycor presented an offer combining equity contributions and industrial synergies.

A binding offer was submitted on Jan. 16, revised and improved several times, and most recently on Feb. 8.

The Ycor offer includes substantial contributions in equity only, including a maximum contribution of €40 million in new money from share capital increases with or without maintaining shareholders’ preferential subscription rights.

The offer also includes the potential contribution in kind of digital communication company Regicom.

Existing senior debt would be partially repaid with the equity contributions.

The offer includes a reduction in debt by around 80% with different amortization profiles depending on the nature of the reinstated debt.

Solocal would be controlled by Ycor. Current shareholders would be massively diluted as their existing shares would represent less than 1% of the capital.

The company supports Ycor’s offer as it seems more sustainable and can be implemented with the support of the revolving credit facility lenders.

Next steps

The company will consult with bondholders on the implementation of the Ycor offer by amending the safeguard plan.

The company has also opened conciliation proceedings on March 1.

Further, the company continues discussions with its financial creditors to reach a sustainable solution.

Solocal is a French digital marketing company.

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