West Atlantic initiates written procedure over bond restructuring

By Wendy Van Sickle

Columbus, Ohio, April 15 – West Atlantic AB has initiated a bondholder meeting by way of a written procedure for its SEK 800 million of outstanding bonds 2015/2019 (ISIN: SE0007783840), according to a Monday news release.

As announced on April 9, West Atlantic entered into a memorandum of understanding with Lusat Air SL and some major bondholders holding about 32% of the bonds in connection with group refinancing talks.

West Atlantic said the memorandum of understanding was reached after an offer made by Lusat was accepted by its shareholders and bondholders.

The company said it agreed to issue new ordinary shares to Lusat, and, as payment for the ordinary shares, Lusat will provide a €20 million equity contribution, conditional to the approval by the bondholders of the written procedure accepting the complete transaction.

Lusat has since subscribed for new the ordinary shares and has become the majority shareholder of West Atlantic.

Of the equity contribution, West Atlantic said €10 million will be used to partially amortize the bonds at par and the other €10 million will be used for capital needs within the group.

A temporary waiver has been approved by the agent Nordic Trustee & Agency AB regarding the change of control event, with the effect that no bondholder may exercise the put option right.

The temporary waiver is conditional until the earlier of approval or rejection of the refinancing transaction by the bondholders under the written procedure and May 15.

The bondholders’ committee has agreed to vote in favor of the transaction, according to Monday’s release.

Following approval of the transaction by the bondholders, the company will immediately amortize the bonds with the €10 million portion of the contribution. The remaining claim under the bonds will be transferred to a special purpose vehicle entity, which will issue a new bond by a mandatory exchange corresponding to the remaining claim and will accede assets such as aircraft, the company’s warehouse and rights to payments under lease agreements.

Some of these assets will be repurchased by Lusat for €25 million, which will be used to amortize the new bond issued by the SPV.

The new bond will have a three-year term and will bear interest at a rate of 6% for the first year, 7% during the second year and 8% during the third year.

If the bondholders are not fully repaid from the assets transferred to the SPV, they will have a pledge related to Lusat’s purchase price for the shareholders’ shares, which amount to roughly SEK 270 million to be paid before the equity increase.

Pareto Securities AB has been retained as financial adviser, and Gernandt & Danielsson Advokatbyrå KB has been retained as legal adviser to the company. Mesana Capital has been retained as financial adviser to Lusat.

Those with questions regarding the administration of the written procedure are asked to contact Nordic Trustee (+46 8 783 79 00 or voting.sweden@nordictrustee.com).

Those with questions relating to the bonds are asked to contact Markus Wirenhammar at Pareto Securities, (+46 708 72 51 86 or Mw@paretosec.com).

West Atlantic Group is a Gothenburg, Sweden-based provider of European air freight services.

© 2015 Prospect News.
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