Ocado noteholders consent to waiver, amendment under 4% notes

By Wendy Van Sickle

Columbus, Ohio, July 19 – Ocado Group plc said it received consents from holders of more than a majority of its 4% senior secured notes due 2024, which met the requisite threshold to approve a waiver and amendments proposed by a consent solicitation that expired at 11 a.m. ET on July 19.

The consent solicitation related to a proposed joint venture between Ocado and Marks and Spencer, as reported by Prospect News when the solicitation was launched on July 12.

On Feb. 27, Ocado, Ocado Holdings Ltd., Marks and Spencer Holdings Ltd. (M&S Holdings), Marks and Spencer Group plc and Marks and Spencer plc had entered into a share purchase agreement under which Ocado Holdings will dispose of 50% of Ocado’s U.K. retail business through the disposal of 50% of the entire issued share capital of Ocado Retail Ltd., which owns Speciality Stores Ltd., to M&S Holdings. The Ocado Retail sale will result in a 50/50 joint venture formed between Ocado Holdings and M&S Holdings.

The purpose of the consent solicitation was to (i) obtain waivers with respect to any breaches of covenants or other provisions in the notes indenture, and any related default or event of default, which may otherwise arise as a result of the joint venture transaction; and (ii) provide some additional flexibility for Ocado and its subsidiaries to engage in transactions with the joint venture on an ongoing basis.

Given that the necessary consents were received, the company has executed a supplemental indenture, according to a July 19 update from the company. The waiver and the proposed amendments will become operative shortly before the Ocado Retail sale closes.

The company offered a consent fee of £2.50 per £1,000 principal amount.

The company expects to pay the consent fee no later than closing of the Ocado Retail sale, which is currently slated for Aug. 5.

Goldman Sachs International (+44 20 7552 6157 or liabilitymanagement.eu@gs.com) acted as the solicitation agent, with Lucid Issuer Services Ltd. (+44 20 7704 0880 or ocado@lucid-is.com) as the tabulation and information agent.

Ocado is a Hatfield, U.K.-based supermarket company. Marks and Spencer is a London-based multinational retailer of clothing, home products and food.

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