Axactor and Geveran enter into binding agreements for the establishment of the Portfolio Investment Company
Oslo, 24 October 2017 - Reference is made to the announcement of
14 August 2017 that Axactor AB (publ) ("Axactor") and Geveran
Trading Co. Limited, a company indirectly controlled by trusts
established by Mr. John Fredriksen for the benefit of his
immediate family ("Geveran"), had signed a letter of intent
regarding the establishment of a jointly owned portfolio
investment company (the "Portfolio Investment Company"). Axactor
is pleased to announce that the investment partnership agreement
(the "Investment Partnership Agreement") for the establishment of
the Portfolio Investment Company has now been entered into.
As previously announced, the Portfolio Investment Company will
focus on larger portfolios above EUR 30 million in Capex and have
a first right of refusal on such portfolios. The Portfolio
Investment Company will invest in new portfolios for a period of
24 months after which the Portfolio Investment Company will
continue to manage the portfolios acquired up until then. Axactor
will continue to acquire commercially attractive portfolios below
the EUR 30 million threshold on its own. The Portfolio Investment
Company may acquire portfolios below EUR 30 million that Axactor
does not acquire. The country operating subsidiaries of Axactor
will enter into service agreements with the Portfolio Investment
Company for the purpose of sourcing, managing and collecting on
portfolios acquired and owned by the Portfolio Investment Company.
The Portfolio Investment Company will be capitalised with minimum
share capital of EUR 12,000 and with additional capital in the
form of deeply subordinated income sharing notes (the "Income
Sharing Notes") in the total amount of EUR 60 million. Axactor and
Geveran will each own 50 per cent of the share capital of the
Portfolio Investment Company, and each of Axactor and a company
affiliated with Geveran will invest EUR 30 million in the Income
Sharing Notes. The affiliate of Geveran has also committed to
provide additional financing in the form of subordinated loan
notes (the "Subordinated Loan Notes") in the amount of EUR 120
million with an interest margin of 650 bps over EURIBOR. In
addition, the Portfolio Investment Company has obtained commitment
from a leading Nordic bank for a senior secured debt facility (the
"Senior Secured Debt Facility") in the amount of EUR 120 million
with a two year tenor whereof 40 million is an accordion facility.
It is expected that final documentation for the Income Sharing
Notes, the Subordinated Loan Notes and the Senior Secured Debt
Facility will be completed in early Q4 2017.
Subject to final loan documentation, the Portfolio Investment
Company will have a total investment capacity of around EUR 300
million and a highly competitive capital structure with attractive
equity returns.
Both Axactor and Geveran will be represented in the Board of
Directors of the Portfolio Investment Company and will have veto
rights on major decisions such as portfolio acquisitions and
additional financing of the Portfolio Investment Company. Axactor
will prepare and present business cases for portfolio purchases
within the scope of the Portfolio Investment Company's business
objective to the Board of Directors of the Portfolio Investment
Company. The Investment Partnership Agreement also includes other
customary provisions for this type of partnerships.
"We are very pleased to have entered into binding agreements for
the establishment of the Portfolio Investment Partnership and soon
be ready to make portfolio acquisitions in line with the plan that
was communicated earlier. The Portfolio Investment Company alone
has capacity to invest close to EUR 300 million with the total
financing that has been secured at an attractive cost of capital.
We see a strong pipeline of opportunities of portfolios of all
sizes." says Endre Rangnes, CEO of Axactor.
DNB Markets, a part of DNB Bank ASA is acting as financial adviser
and Advokatfirmaet Haavind AS is acting as legal adviser to
Axactor in relation to the Portfolio Investment Company.
For additional information, please contact:
Endre Rangnes, CEO Axactor
Mobile phone: +47 4822 1111
Email: endre.rangnes@axactor.com
or
Geir Johansen, CFO & Investor Relations, Axactor
Mobile phone: +47 4771 0451
Email: geir.johansen@axactor.com
www.axactor.com
About Axactor
Axactor Group specializes in both Debt Collection and Debt
Purchasing across several countries, with operations in Italy,
Germany, Norway, Sweden and Spain. The company has a Nordic base
and an ambitious Pan-European growth strategy, which targets the
market for non-performing loans (NPL) in Europe. This market is
estimated to be about 1,500 billion euros across Europe providing
significant opportunities for Axactor's future expansion. Axactor
has approximately 900 employees.