SoLocal creditors approve revised plan; fairness opinion released

By Caroline Salls

Pittsburgh, Dec. 1 – SoLocal Group said more than two-thirds of its creditors approved its revised financial restructuring plan.

According to a news release, the plan will now be submitted to the vote of shareholders at an extraordinary general shareholders’ meeting scheduled for Dec. 15. The shareholders’ vote will decide the implementation of the company’s restructuring plan and “Conquer 2018” plan.

Following shareholder approval, the plan will still need to be submitted for the approval of the Commercial Court of Nanterre.

In addition, SoLocal Group said a report issued by Didier Kling & Associés, who acted as an independent expert with the mission to provide a fairness opinion of the proposed subscription prices for the reserved issuances of shares in connection with the restructuring, is now available to shareholders.

SoLocal said the report concluded that the revised financial restructuring plan satisfies the desire to address the particularly delicate situation the company faces with debt of €1,164,000,000 due and payable, and its approval appears absolutely critical at a time when the company’s continuity is threatened, as creditors have indicated that they will not support the restructuring project if it is not accepted by the shareholders.

The report also found that the planned reduction of the level of the company’s debt to €400 million is “a level deemed sustainable to allow SoLocal to continue its business and roll out its ‘Conquer 2018’ strategic plan.”

Also, the report concluded that the procedures for this restructuring are particularly complex, and it is difficult to model the plan’s consequences.

The report said those consequences are related to multiple factors, including the behavior of shareholders and the uncertain post-restructuring stock price.

“Continuation of SoLocal’s business without a financial restructuring would be compromised,” the report said. “Such a scenario would lead a reduction in the value of SoLocal’s current debt to its enterprise value, which is not sustainable and would result in the SoLocal share price dropping to zero.”

The report encouraged shareholders to subscribe for the proposed capital increase at a price of €1, which is a discount of the report’s €1.53 to €1.81 value per share. Subscription will allow shareholders to significantly limit their dilution, the report said, which will be eased by the grant of free shares.

“In summary and in light of the foregoing, the terms of the various issues seem to us to be fair to the shareholders from a financial point of view as they will ensure the company’s continuity,” the report said.

SoLocal is a Boulogne-Billancourt, France, online communications company.

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