Homologation of Latecoere’s Comprehensive Recapitalization Agreement
17 June 2023 - 5:18AM
Business Wire
- Latecoere and its stakeholders have entered into and
obtained homologation of their definitive documentation for a €283
million business recapitalization, including a committed capital
increase of at least €100 million, in conjunction with €183 million
reduction of its financial debt
- Latecoere is currently rebounding from the COVID crisis,
having grown revenue +39% in 2022
- This agreement puts Latecoere on a strong footing to
continue supporting its customer growth requirements including
increased working capital needs arising from the global aerospace
recovery
- Agreement enables Latecoere to implement its industrial
objectives and confirms the central role of France and the Toulouse
region within this vision
Regulatory News:
Latecoere, a tier one partner to major international aircraft
manufacturers, today reached a major step forward in its
recapitalization with the signature and the homologation by the
Toulouse Commercial Court of a binding conciliation protocol
between its reference shareholder Searchlight Capital Partners L.P.
(“SCP”), the European Investment Bank (“EIB”), and its lenders
under certain state guaranteed loans (Prêts Garanti par l'Etat),
(the "PGE Lenders"), reflecting the terms of the agreement in
principle reached on May 8, 2023 (“Recapitalization Agreement”).
This Recapitalization Agreement has been negotiated and concluded
under the aegis of the Comité Interministériel de Restructuration
Industrielle (CIRI).
While the aerospace industry has been through an unprecedented
crisis linked to the COVID pandemic and subsequent restart –
Latecoere has itself been faced with significant challenges in
order to meet increasing production demand, absorb significant
inflation pressures and also contend with supply chain challenges
and shortages of parts from key suppliers. This Recapitalization
Agreement provides Latecoere with a solid capital structure to
continue supporting its customers through the industry ramp-up
currently planned for the remainder of 2023 and beyond.
The key terms of the recapitalization, consistent with the May
8, 2023 market communication, include:
- Immediate liquidity through a €45 million loan from funds
advised by SCP, to be repaid by way of set-off with SCP's
subscription in the €100 million rights issue (“SCP Loan”);
- Following its July 2023 AGM, the Company is expecting to launch
a rights issue with shareholders’ preferential subscription rights
for a minimum amount of €100 million1 fully underwritten by SCP,
and to be concluded before year end (“Capital Increase”);
- €183 million debt reduction, providing Latecoere with a
sustainable capital structure. The reinstated debt maturity is to
be set to December 2027; and
- Affected lenders will retain exposure to future value creation
through a newly issued "better fortunes" (retour à meilleure
fortune) mechanism (“RMF”).
Thierry Mootz, Group Chief Executive Officer, says: "I would
like to thank all the parties involved for having made possible
this conciliation protocol agreed and homologated. This action
significantly reinforces our capital base and enables us to meet
the increasing growth requirements of our customer base and realize
Latecoere's full potential. We are grateful for the support of our
anchor shareholder, our lenders and the CIRI, in achieving our
common ambitions. I would also like to thank all our employees for
their commitment and talent. They are the reason Latecoere is given
the confidence by its key customers within the aerospace sector
every day. With the signature of this conciliation protocol, I also
wish to reiterate the principles of our industrial vision; to
maintain our decision-making center in Toulouse, to consolidate our
value-added activities in the Toulouse region, and to continue to
invest in our global operational footprint".
PGE Lenders will continue to remain integral stakeholders to
Latecoere, with €85 million of their indebtedness being maintained
without any intermediate amortisation until the maturity on 31
December 2027. 2 This reinstated debt will continue to benefit from
the 90% French State guarantee. The €183 million debt reduction
will occur at closing of the Capital Increase. In addition, as part
consideration for the debt reduction, the affected Lenders will
remain aligned with Latecoere’s future value creation through an
RMF, which will crystallize and be paid (in cash) notably in the
event of a longer term change of control of Latecoere, subject to
achieving pre-agreed trigger thresholds.
The €183 million debt reduction is conditioned to a Capital
Increase of a minimum of €100 million. Prior to the initiation of
the Capital Increase, the Company will enact a reverse stock split
through a share consolidation of one (1) new share for ten (10)
existing shares, followed by a capital reduction through a
reduction in the par value of the shares to 0.01 Euro (one Cent)
per share. The Capital Increase will be conducted at a post share
consolidation price of 0.01 Euro, resulting in a look through
subscription price for the Capital Increase of 0.001 (one tenth of
a Cent) Euro per share on a pre-stock consolidated basis. On a
pro-forma basis, the newly issued shares will represent circa 99.5%
of the increased post-money share capital.3
As a result of the aforementioned reverse stock split, it is
envisaged that the Capital Increase will commence during Q4 2023,
with preferential subscription rights for a minimum amount of €100
million, subject to a 15% extension clause,4 at the discretion of
the Board of Directors, and subject to minority participation. SCP
has committed €100 million to the Capital Increase, with an initial
€45 million already advanced to the Company by way of the SCP Loan,
which will be re-paid by way of a set-off against part of the
subscription price payable by SCP in relation to the Capital
Increase.
Finally, the Company informs that:
- In conjunction with the homologation of the Recapitalization
Agreement, the Toulouse Commercial Court has also homologated the
sale of Latecoere’s EWIS business in Mexico to Bombardier, a
condition precedent to closing, which is targeted to complete by
mid-year 2023; and
- the next Annual General Meeting will be postponed end of July
2023.
Key timeline dates for the Recapitalization Agreement are set
out below:
Recapitalization Timetable
End of July 2023
Shareholders' Meeting approving (i) the
Preliminary Changes to the Share Capital and (ii) the delegations
required to carry out the Capital Increase
August – September 2023
Reverse stock split
October 2023
Sale of fractional shares resulting from
the reverse stock split
Capital Reduction
AMF approval of the Capital Increase
“prospectus”
November 2023
Capital increase: Subscription period
On or before November 30, 2023
Delivery of new shares
Capital Increase closing
Debt reduction
About Latecoere
Tier 1 to the world’s leading industry manufacturers (Airbus,
BAE Systems, Boeing, Bombardier, Dassault Aviation, Embraer,
Lockheed Martin, Raytheon Technologies, Thales), Latecoere serves
aerospace with innovative solutions for a sustainable world. The
Group operates in all segments of the aerospace industry
(commercial, regional, business, defense and space) in two business
areas:
- Aerostructures (55% of sales): doors, fuselage, wings and
empennage, struts & rods and customer services;
- Interconnection Systems (45% of sales): wiring, avionic racks,
onboard equipment, electronic systems and customer services.
As of December 31, 2022, the Group employed 5,918 people in 14
countries. Latecoere is listed on Euronext Paris - Compartment B,
ISIN Code: FR0000032278 - Reuters: AEP.PA - Bloomberg: AT.FP
_____________________________ 1 Subject to a 15% extension
clause, subject to minority participation 2 For reference, affected
lender loans amount to circa €268 million as at 31 Dec 2022 3 For
illustrative purposes, a 1% non-participating shareholder in the
rights issue will, post share issuance, have a circa 0.005%
ownership of the enlarged share capital 4 To serve the requests for
subscription à “titre réductible”
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230616303000/en/
Thierry Mahé / Media Relations +33 (0)6 60 69 63 85
LatecoereGroupCommunication@latecoere.aero
Latin American Minerals (TSXV:LAT)
Historical Stock Chart
From Apr 2024 to May 2024
Latin American Minerals (TSXV:LAT)
Historical Stock Chart
From May 2023 to May 2024