Norske Skogindustrier ASA: Update on recapitalization process

As announced on 14 July 2017, the ad hoc committee of holders of the EUR 290 million senior secured notes (such notes being the “SSNs” and the committee, the “SSN AHC”) and the holders of the EUR 100 million NSF loan notes due 2020 (the “NSF”), who hold approximately 46 per cent. of the group’s financial indebtedness (excluding local facilities), have provided Norske Skog with a recapitalization proposal. The company has shared its views on the proposal with the SSN AHC and the NSF holders and the SSN AHC and the NSF holders have shared their proposal with other creditor groups.

The company has also received a short-form term sheet from the SSN AHC and the NSF holders relating to the provision of (i) a short term Euro 15 million secured facility guaranteed by certain members of the group and (ii) a backstop guarantee facility to help support the operating business of the company’s subsidiaries. The company is in the process of considering these financing proposals.

To allow for the conclusion of the ongoing stakeholder discussions to be reflected, the company has also today announced that the deadline for the current exchange offers and consent solicitations has been further extended from 31 July 2017 to 11 August 2017.

– “We are working relentlessly to facilitate inter-creditor dialogue and discussions in order to come to a position to present a revised transaction proposal which achieves the main goals we set when the process was launched. We are hopeful that a revised transaction proposal which has strong support can be announced within a relatively short period of time,” said Lars P.S. Sperre, President and CEO of Norske Skog.

The standstill agreement entered into with the SSN AHC, in respect of the non-payment of the EUR 17 million interest payment due on the SSNs on 15 June 2017, has been extended to provide forbearance up to 11 August 2017. Additionally, Norske Skog AS has entered into a new standstill agreement with the NSF holders providing forbearance up to 11 August 2017 in respect of the non-payment of the EUR 3 million interest payment due on the NSF on 30 June 2017. These forbearances provide the group with certain protections in relation to the non- payment of the respective interest payments beyond the grace period.

The company had previously resolved to utilize the 30-day contractual grace period in respect of the EUR 2 million interest payment on the senior unsecured notes due in 2026 (the “2026 Notes”) that was due on 30 June 2017 (the “2026 Notes Coupon”). The grace period in respect of the 2026 Notes Coupon expires on 30 July 2017. While the ongoing recapitalization process continues, it has been a priority to provide for stability in the group’s operating business, amongst other things, by preserving liquidity. In line with the resolutions not to pay the interest due on the SSNs and the NSF prior to the expiry of the relevant grace periods, the board of directors of the company has resolved that the 2026 Notes Coupon will not be paid prior to the expiry of the grace period on 30 July 2017. No standstill agreement has been entered into by the company with the holders of the 2026 Notes.

The board of directors of the company will call for an extraordinary shareholder meeting to be held in late August, after the Q2 financial reporting, in order to provide the shareholders with, amongst other things, an update on the financial situation of the company (cf. Section 3-5 of the Norwegian Public Limited Liability Companies Act) and the status of the recapitalization process.
http://www.norskeskog.com/Default.aspx?ID=2890&t=2017-07-28T22:18:39+02:00

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