Inside information: HKFoods considers issuance of new notes, announces tender offer and procedure in writing regarding its outstanding notes maturing in March 2025
HKFoods Plc, Stock Exchange Release, Inside Information 31 May 2024, 2.20 p.m. Finnish time
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SOUTH AFRICA OR SUCH OTHER COUNTRIES OR OTHERWISE IN SUCH CIRCUMSTANCES IN WHICH THE OFFERING OF THE NEW NOTES, THE TENDER OFFER OR THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SOUTH AFRICA OR SUCH OTHER COUNTRIES OR OTHERWISE IN SUCH CIRCUMSTANCES IN WHICH THE OFFERING OF THE NEW NOTES, THE TENDER OFFER OR THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.
Inside information: HKFoods considers issuance of new notes, announces tender offer and procedure in writing regarding its outstanding notes maturing in March 2025
HKFoods Plc (the "Company") contemplates the issuance of new euro-denominated floating rate secured senior notes (the "New Notes") (the "Issue"). At the same time, the Company also announces that it invites the holders (each a "Noteholder") of its EUR 90 million 5.000 per cent fixed-rate unsecured senior notes due 24 March 2025 (ISIN: FI4000490990), the outstanding nominal amount of which is EUR 90 million (the "Notes"), to tender their Notes for cash on the terms and conditions set out in the consent solicitation and tender offer memorandum dated 31 May 2024 (the "Tender Offer and Consent Solicitation Memorandum") (the "Tender Offer") as well as to participate in a procedure in writing (the "Procedure in Writing") to amend the terms and conditions of the Notes to remove the negative pledge undertaking under the terms and conditions of the Notes. The New Notes will be offered pursuant to an exemption from the obligation to publish a prospectus under Article 1(4) of the Prospectus Regulation ((EU) 2017/1129, as amended).
The Noteholders are encouraged to reach out directly to the Dealer Managers and the Solicitation Agents (as defined below with contact details) for more information regarding the Tender Offer and the Procedure in Writing in respect of the Notes.
Details of the Tender Offer
The purpose of the Tender Offer in conjunction with the issuance of the New Notes is to proactively manage upcoming debt redemptions, strengthen the Company's balance sheet and to extend the average debt maturity profile for the Company.
The purchase price for the Notes in the Tender Offer is 101.250 per cent (the "Purchase Price"). The Company intends to accept for purchase any and all tender instructions from Noteholders who also subscribe for the New Notes, up to the nominal amount subscribed for and allocated in the issue of New Notes (or a higher amount at the sole discretion of the Company), rounding down to the nearest denomination of the Notes (the "Priority Tenders"), subject to satisfaction of or waiver by the Company of the New Issue Condition (as defined below).
Whether the Company will accept for purchase any Notes validly tendered is subject (unless such condition is waived by the Company on its sole discretion), without limitation, to (i) the successful pricing of the contemplated issue of the New Notes, on terms satisfactory to the Company (in its sole discretion), and the signing by the Company and the joint lead managers of an issuance agreement for the issuance of the New Notes and such issuance agreement remaining in full force and effect as at the settlement date of the New Notes and not having been terminated, and (ii) fulfilment of the Noteholders’ Approval Condition (as defined below) (jointly the "New Issue Condition").
The offer period of the Tender Offer commences on 31 May 2024 and expires at 4.00 p.m. Finnish time on 7 June 2024. The indicative results of the Tender Offer will be announced on or about 7 June 2024. The final results of the Tender Offer will be announced as soon as feasible, but no later than 20 June 2024. The settlement date of the Tender Offer and the New Notes will in no case be later than 2 July 2024, subject to the completion of the issuance of the New Notes.
A holder that wishes to subscribe for the New Notes in addition to tendering the Notes for purchase pursuant to the Tender Offer may be eligible to receive priority in the allocation of the New Notes in the Company’s sole and absolute discretion and subject to the completion of the Tender Offer, the selling restrictions contained in the listing prospectus for the New Notes and the satisfaction or waiver of the New Issue Condition. Such priority ("New Issue Allocation", as further defined in the Tender Offer and Consent Solicitation Memorandum) may be given for an aggregate nominal amount of Notes up to the aggregate nominal amount of the Notes subject to a Noteholder's valid tender instruction, subject to the acceptance for purchase by the Company of the Notes so tendered. Such tender instruction must relate to a minimum of EUR 100,000 in aggregate nominal amount of the Notes. A holder that wishes to subscribe for the New Notes must make an application to subscribe for such New Notes to a joint lead manager of the issue of the New Notes.
Details of the Procedure in Writing
It is contemplated that the New Notes will be secured by a common transaction security comprising, among other things, (i) shares in HKScan Finland Oy (to be renamed HKFoods Finland Oy) (the "Finnish Subsidiary"), (ii) intra-Group receivables owed to the Company by the Finnish Subsidiary, (iii) certain loan receivables of the Company from LSO Osuuskunta, (iv) real estate mortgages over the Finnish real properties held by the Company and the Finnish Subsidiary, (v) certain trademarks of the Finnish Subsidiary, and (vi) business mortgages over the movable assets of the Company and the Finnish Subsidiary (jointly, the "Common Transaction Security"), to be held by a common security agent (the “Common Security Agent”) as an agent and representative of the holders of the New Notes and certain other common secured parties.
To enable the issuance of the New Notes and the granting of the Common Transaction Security, it is proposed in the Procedure in Writing that the Noteholders resolve to remove Clause 9 (Negative Pledge) of the terms and conditions of the Notes (the "Proposal"). The Proposal shall be deemed to have been approved by and becomes binding upon Noteholders immediately upon the expiry of the voting period and receipt of the required majority or, if earlier, when a requisite majority of consents have been received by the Tender Agent (as defined below with contact details) and the Tabulation Agent (as defined below with contact details) even if the voting period in the Procedure in Writing has not yet expired (the "Noteholders' Approval Condition").
Pursuant to the terms and conditions of the Notes, quorum in respect of the Procedure in Writing only exists if one (1) or more Noteholders holding in aggregate at least fifty (50) per cent of the principal amount of the Notes outstanding provide/provides replies in the Procedure in Writing. Any holdings of the Notes by the Company and any companies belonging to its group are not included in the assessment whether or not the Procedure in Writing shall constitute a quorum.
The Proposal requires the consent by a majority of more than fifty (50) per cent of the votes cast.
To be eligible to participate in the Procedure in Writing a person must at the record time (at 5 pm (Finnish time) on 30 May 2024) (the "Record Time") be registered as a holder of one or several Notes on the list of Noteholders maintained by Euroclear Finland Oy as a directly registered owner (in Finnish: omistaja) or nominee (in Finnish: hallintarekisteröinnin hoitaja), and hold any of the principal amount of the Notes on the last day for replies in the Procedure in Writing.
The Tabulation Agent (as defined below) must have received all votes through submission of a valid voting and tender instruction or by email to the address indicated in the notice of the Procedure in Writing and Tender Offer attached to this stock exchange release no later than 4.00 pm (Finnish time) on 10 June 2024. Votes received thereafter may be disregarded.
The Noteholders are advised to carefully read the notice of Procedure in Writing and Tender Offer and Consent Solicitation Memorandum for full details of, and information on, the Proposal and the Tender Offer and the procedures for participating in the Procedure in Writing and/or the Tender Offer. The notice of Procedure in Writing and Tender Offer is attached to this stock exchange release. The Tender Offer and Consent Solicitation Memorandum will be distributed by the Solicitation Agents and the Dealer Managers (as defined below), and further copies are available upon request from the Solicitation Agents and the Dealer Managers.
The Company has mandated Danske Bank A/S and OP Corporate Bank plc as solicitation agents (the "Solicitation Agents") and as dealer managers (the "Dealer Managers") and OP Corporate Bank plc as tabulation agent (the "Tabulation Agent") and as tender agent (the "Tender Agent") in the Procedure in Writing in respect of the Notes and the Tender Offer, as applicable. Danske Bank A/S and OP Corporate Bank plc act also as joint lead managers for issue of the New Notes.
Attachments:
Notice of the Procedure in Writing and Tender Offer in respect of the Notes
Dealer Managers and Solicitation Agents provide additional information on the Procedure in Writing and Tender Offer:
Danske Bank A/S: e-mail: liabilitymanagement@danskebank.dk / tel: +45 33 64 88 51
OP Corporate Bank plc: e-mail: liabilitymanagement@op.fi / tel: +358 50 599 1281
Distribution:
Nasdaq Helsinki
Key media
www.hkfoods.com
Further enquiries:
Juha Ruohola, CEO, HKFoods Plc, tel. +358 400 647 160
Jyrki Paappa, CFO, HKFoods Plc, tel. +358 50 556 6512
HKFoods Media Service Desk, tel. +358 10 570 5700 or communications@hkfoods.com
With 110 years of experience, we at HKFoods make life tastier – today and tomorrow. Our strategic target is to grow into a versatile food company. Our home markets are Finland and Denmark, where around 3,600 of our professionals make responsible and locally produced food for consumers’ varied food moments. Our well-known brands include HK®, Kariniemen®, Via® and Rose®. We are developing a more climate-friendly way of producing food. HKFoods is a publicly listed company, and in 2023, our net sales from continuing operations totalled nearly EUR 1.2 billion. www.hkfoods.com
Important Information
This communication must be read in conjunction with the Tender Offer and Consent Solicitation Memorandum, which may be obtained from Danske Bank A/S or OP Corporate Bank plc, and is only available to, qualifying holders of the Notes. This communication and the Tender Offer and Consent Solicitation Memorandum contain important information that should be read by the qualifying holders of the Notes carefully before any decision is made with respect to the Tender Offer or the Procedure in Writing. If any holder is in any doubt as to the contents of this communication or the Tender Offer and Consent Solicitation Memorandum or the action it should take, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. None of the Dealer Managers or the Tender Agent of the Tender Offer, the Solicitation Agents or the Tabulation Agent of the Procedure in Writing, nor the Company makes any recommendation whether holders should tender Notes pursuant to the Tender Offer or participate in the Procedure in Writing.
None of the Dealer Managers or the Tender Agent of the Tender Offer, the Solicitation Agents or the Tabulation Agent of the Procedure in Writing or any of their directors, officers, employees, agents or affiliates assumes any responsibility for the accuracy or completeness of the information concerning HKFoods, the Notes, the Tender Offer, or the Procedure in Writing contained in this communication or in the Tender Offer and Consent Solicitation Memorandum. None of the Company or any of its directors, officers, employees, agents or affiliates is acting for any holder of the Notes nor will the Dealer Managers or the Tender Agent of the Tender Offer or the Solicitation Agents or the Tabulation Agent of the Procedure in Writing or any of their directors, officers, employees, agents or affiliates be responsible to any holders for providing the protections afforded to their clients or for advising any holders in connection with the Tender Offer or the Procedure in Writing.
The information contained herein is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States or such other countries or otherwise in such circumstances in which the release, publication or distribution would be unlawful. The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the New Notes any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
This communication does not constitute an offer of securities for sale in the United States. The Notes or the New Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under the applicable securities laws of any state of the United States and may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
This communication does not constitute an offer of the Notes or the New Notes to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the Notes or New Notes. Consequently, this communication is directed only at (i) persons who are outside the United Kingdom, (ii) persons in the United Kingdom that are qualified investor within the meaning of Article 2(e) of the Prospectus Regulation as incorporated into UK domestic law by virtue of the European Union (Withdrawal) Act 2018 that are also (a) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (b) high net worth entities, and (iii) other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity to which this communication relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.