SRV commences written procedures to amend terms of its senior unsecured notes

SRV GROUP PLC    INSIDE INFORMATION    29 March 2021     20:00 EET

SRV commences written procedures to amend terms of its senior unsecured notes

SRV Group Plc ("SRV") announces written procedures in respect of its EUR 100,000,000 (of which EUR 62,096,000 is outstanding) senior unsecured callable fixed rate notes due 23 March 2022 (the "2022 Notes") and its EUR 75,000,000 senior unsecured callable fixed rate notes due 27 September 2023 (the "2023 Notes" and together with the 2022 Notes, the "Senior Notes") regarding potential amendments to the terms and conditions of the Senior Notes.

On 31 October 2019, SRV announced a recovery programme, which sought to implement multiple measures aimed at improving SRV's profitability as well as strengthening its balance sheet. Measures presented included personnel reductions, capital release from its balance sheet, increased procurement efficiency and tighter project tendering criteria.

The recovery programme was further complemented by several additional measures, which were announced on 6 February 2020. These measures included the sale of SRV's stake in the REDI shopping centre, a reduction of SRV's ownership in the Tampere Deck and Arena project, amendments to SRV's revolving credit facility as well as strengthening SRV's balance sheet by two share issues.

Over the past year, SRV has worked diligently to execute on its recovery programme and has completed six out of the eight measures outlined in the programmes, with the remaining two being well under way. The swift execution on its recovery programme has helped SRV to return to a positive operating profit in 2020 and has furthermore served to strengthen its balance sheet as well as to significantly reduce its interest-bearing debt.

On 4 February 2021, SRV announced its new strategy and its long-term financial objectives for 2021–2024. The strategy aims to develop long-term competitive advantage, to provide an excellent customer experience, to tap into opportunities for lifecycle services, to improve profitability and to reduce indebtedness.

Nevertheless, SRV's ability to pursue its strategic objectives in the coming years is limited by the maturity structure of its senior loans. This has led SRV to pursue a more balanced loan maturity structure. For this objective, SRV has conducted negotiations with its senior bank lenders and received a term sheet for the extension of SRV's senior bank debt, which term sheet however is subject to further negotiations, documentation being agreed and certain conditions precedent, including an extension of the maturity dates of the Senior Notes.

SRV is therefore initiating the written procedures in respect of the Senior Notes to provide SRV with additional runway to execute on the remaining strategic initiatives.

In the written procedures, SRV proposes:

• to the holders of the 2022 Notes that the final maturity date of the 2022 Notes be extended from 23 March 2022 to 23 March 2025, and to the holders of the 2023 Notes that the final maturity date of the 2023 Notes be extended from 27 September 2023 to 27 March 2025;
• an inclusion of a mandatory partial redemption obligation for SRV to redeem EUR 22,096,000 in aggregate nominal amount of the 2022 Notes and EUR 5,000,000 in aggregate nominal amount of the 2023 Notes at an amount payable equal to 101.75 per cent. of the portion of nominal amount redeemed per 2022 Note or 2023 Note, respectively;
• an inclusion of a mandatory partial redemption obligation for SRV to redeem on each interest payment date which is not a redemption date EUR 2,500,000 in aggregate nominal amount of the 2022 Notes and EUR 2,500,000 in aggregate nominal amount of the 2023 Notes at an amount payable equal to 101.75 per cent. of the portion of nominal amount redeemed per 2022 Note or 2023 Note, respectively;
• an amendment to the limitation on indebtedness pursuant to Clause 10.6 of the terms and conditions of the 2022 Notes and 2023 Notes, respectively; and
• certain other amendments for the purpose of amending or deleting certain obsolete provisions.

Prior to the announcement of the written procedures, discussions have been held with a group of primarily larger institutional holders which have expressed strong support for the amendments through the signing of voting undertakings; together, these holders represent a majority of the outstanding nominal amount of the 2022 Notes and 2023 Notes, respectively.

Pursuant to the terms and conditions of the 2022 Notes and the 2023 Notes, respectively, quorum in respect of a written procedure only exists if holders representing at least 50 per cent. of the Adjusted Nominal Amount (as defined in the terms and conditions of the 2022 Notes and the 2023 Notes, respectively) reply to the written procedure. The proposed amendments pursuant to the written procedures require the consent of holders representing at least 75 per cent. of the Adjusted Nominal Amount (as defined in the terms and conditions of the 2022 Notes and the 2023 Notes, respectively), for which holders reply in the written procedure.

To be eligible to participate in either written procedure, a person must be a holder of 2022 Notes or 2023 Notes, respectively, at the end of the CSD Business Day (as defined in the terms and conditions of the 2022 Notes and the 2023 Notes, respectively) on 29 March 2021. The final deadline for submission of a valid voting form is 5 p.m. (Finnish time) on 27 April 2021, at which time the voting form must be received by the Agent (as defined in the terms and conditions of the 2022 Notes and the 2023 Notes, respectively) via email, post or courier delivery.

Holders of the Senior Notes are advised to read carefully the notices of written procedure for full details of, and information on, the proposed amendments and the procedures for participating in the written procedures. The notices of written procedure are attached to this stock exchange release.

If the proposed amendments are not duly approved in the written procedures in respect of both the 2022 Notes and the 2023 Notes, the terms and conditions of both the 2022 Notes and the 2023 Notes will remain unchanged.

SRV has mandated Pareto Securities AB as financial advisor in the written procedures in respect of its Senior Notes.

Holders of the Senior Notes are encouraged to reach out directly to Pareto Securities AB (contact details below) for more information regarding the written procedures in respect of the Senior Notes.

Attachments:
Notice of written procedure in respect of the 2022 Notes
Notice of written procedure in respect of the 2023 Notes

For further information, please contact:
Jarkko Rantala, CFO, Tel. +358 40 674 1949, jarkko.rantala@srv.fi
Ville Takala, CEO, Pareto Securities Oy, Tel. +358 50 1745, ville.takala@paretosec.com

Distribution:
Nasdaq Helsinki
Main media
www.srv.fi

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SRV in brief
SRV is a developer and innovator in the construction industry. Our objective is a new lifecycle-wise reality where solutions related to construction ensure well-being, financial value and the benefit of users, residents and environment – for years and generations to come. Our genuine cooperation and enthusiasm for our work comes across in every encounter. Sustainability is reflected in all our activities.

Our company, established in 1987, is listed on the Helsinki Stock Exchange. We operate in growth centres in Finland and Russia. In 2020, our revenue totalled EUR 975.5 million. In addition to about 1,000 SRV employees, we employ a network of around 4,200 subcontractors.

SRV - Building for life