Esmaeilzadeh Holding announces intention to become debt free during 2024 and initiates a written procedure to amend the terms and conditions of its bond
Esmaeilzadeh Holding AB (publ) (“EHAB” or the “Company”) today announces its intention to become debt free during 2024. EHAB is currently exploring several initiatives for the purpose of realising values in its portfolio to repay its outstanding bond loan. EHAB has initiated a so-called written procedure to amend the terms and conditions of the bond loan, which would allow EHAB to adequately evaluate and pursue ongoing initiatives.
Due to the recent macroeconomic development which has caused significant change in capital markets conditions, including increasing cost of debt, EHAB today announces its intention to become debt free during 2024, thus amending its financial targets relating to loan-to-value ratio and liquidity. The intention is to provide additional flexibility for EHAB and its portfolio companies and promotes EHAB’s dedication to long-term resilience over the cycles. EHAB’s amended financial targets have been presented in EHAB’s interim report, published on 13 November 2023.
EHAB is currently exploring several initiatives for the purpose of realising values in its portfolio and repaying its outstanding bond loan 2022/2025 with ISIN SE0017133564 (the “Bonds”). In order to allow EHAB to adequately evaluate and pursue such ongoing initiatives, EHAB has initiated a written procedure (the “Written Procedure”) pursuant to the terms and conditions of the Bonds (the “Terms and Conditions”).
The Written Procedure
In accordance with the Terms and Conditions, the Company is obliged to comply with a maintenance covenant by way of maintaining a cash and liquid securities position of SEK 250m, with the covenant stepping up to SEK 500m in connection with the Q1 2024 report (the “Covenant Step-up”). While the Company assesses that it will meet its commitments in relation to the Covenant Step-up, EHAB has today initiated the Written Procedure pursuant to the Terms and Conditions of the Bonds to request bondholders’ consent to waive the Covenant Step-up to cater for risk factors relating to market volatility and the timing of divestments.
If the amendment is approved by the bondholders, it will become effective provided an injection of SEK 100m of equity capital is made into the Company. Moreover, the Company undertakes to place 80 percent of proceeds stemming from a divestment of any portfolio company on an escrow account to be used for debt service purposes. Certain other amendments are listed in the notice to the Written Procedure.
The Company has had discussions with its largest bondholders and the vast majority has communicated to vote in favour of the proposal in the Written Procedure.
The agent will deliver the notice to a Written Procedure to all bondholders on 13 November 2023. The Written Procedure will commence on 13 November 2023 and end on 7 December 2023. To be eligible to participate in the Written Procedure a person must fulfil the formal criteria for being a bondholder on 20 November 2023.
ABG Sundal Collier AB and Pareto Securities AB have acted as financial advisors in connection with the Written Procedure.
The notice to the Written Procedure will be made available on the Company's website (www.ehab.group) and on Stamdata (www.stamdata.com).
For further information, please contact:
Saeid Esmaeilzadeh, CEO and Founder
Email: saeid@ehab.group
This information is such that Esmaeilzadeh Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above on 13 November 2023, 08:00 CET.
About Esmaeilzadeh Holding AB (publ):
EHAB is an entrepreneurially driven investment company that invests in and develops resilient companies within selected industries. The primary focus is investments in operational groups with opportunities for both organic and acquisition-based growth. For more information, see www.ehab.group.