Full details of the €450m bid by the Subordinated Bond Holders in Hellas
Monday, November 23, 2009
PRESS RELEASE
For immediate distribution
Full details of the €450m bid by the Subordinated Bond Holders in Hellas
for the Greek mobile telecoms company
In the interests of fairness, transparency and speed, the Subordinated bond holders in Hellas who this morning tabled a new, full and binding €450 million offer for the assets of Hellas II have now released the full terms of the offer including the details of the ‘early bird’ consent fees – at paragraph 7 - to be paid to the senior lenders.
ENDS
For further information:
Adrian Flook +44 (0)20 7920 2388 / +44 (0)7768 608396
The full contents of the letter are as follows:
23 November 2009
Hellas Telecommunications (Luxembourg) II S.C.A. ("Hellas II")
Final offer to acquire all of the assets of Hellas II, including the entire issued share capital of WIND Hellas Telecommunications S.A. ("WIND Hellas")
We are pleased to submit, on behalf of the Committee (each such term defined below), a final offer for the entire issued share capital of WIND Hellas, the entire issued share capital of Hellas Telecommunications IV S.à r.l.
On any view the Final Offer represents a better outcome for all creditors and we would invite you to immediately initiate a new consent solicitation process. In addition to making the Final Offer, the Committee is willing to start immediate discussions with you for the purposes of providing a short term funding facility into the Hellas II administration for the purposes of allowing you to trade briefly with a view to completing the new consent process, if this cannot actually be completed before 30 November 2009 – although we very much hope it can and see no reason why it cannot.
A successful acquisition by the Committee is, the Committee believes, in the best interests of all stakeholders reliant on the Target Group, from its creditors (as a whole) to its employees, retail franchisees and customers.
1. Valuation/Purchase Price
1.1 The Committee is proposing to credit bid the Subordinated Notes by way of an exchange offer to be made by the Buyer in respect of all of the Subordinated Notes conditional only upon completion of the acquisition of the Target Assets by the Buyer. In addition, the Buyer proposes to assume or cause third parties to buy all of Hellas II's obligations in respect of the senior debt (as more fully described below), and make available an aggregate sum of €450,000,000 in cash (including an aggregate €100,000,000 liquidity funding to WIND Hellas), discharge other costs associated with the acquisition of the Target Assets, and pay consent fees to creditors.
1.2 The structure of the Final Offer would deliver consideration to the Seller carrying an aggregate value in excess of €2.82 billion in respect of all of the Sold Assets (the "Headline Purchase Price") being the aggregate of the amounts below in paragraph 2.
2. Purchase Price
2.1 The Buyer will contribute or cause the contribution of €450,000,000 in cash towards its bid including the €250,000,000 towards acquisition of the RCF debt.
2.2 The Headline Purchase Price for all of the Sold Assets would be as follows:
(A) the nominal value of the Subordinated €1,070,000,000 Notes plus €29,900,000 in respect of accrued interest on the Subordinated Notes) shall be deemed discharged by the Buyer making an exchange offer for the Subordinated Notes. Under the exchange offer, the Buyer would offer (conditional upon completion of the acquisition of the Target Group by the Buyer) to exchange the Subordinated Notes for new instruments to be issued by the Buyer. The exchange offer would be commenced as soon as reasonably practicable following the signing of the SPA;
(B) an amount equal to €250,000,000, shall be deemed discharged by the Buyer assuming equivalent obligations to the existing obligations of the Seller under or in respect of the Senior Subscription Agreement, the Intercreditor Agreement and all other Finance Documents in substitution for the Seller, on such basis as the Seller shall be released from its obligations under such agreements (in accordance with the relevant waivers obtained under the RCF Consent Request) – the Buyer will also procure the purchase of the RCF Facility by Jefferies International Limited ( “Jefferies”);
(C) an amount equal to €1,222,250,000, shall be deemed discharged by the Buyer assuming equivalent obligations to the existing obligations of the Seller under or in respect of the Senior Secured Notes, the Senior Secured Notes Indenture, the Intercreditor Agreement and all other Finance Documents, in substitution for the Seller, on such basis as the Seller shall be released from its obligations under such agreements (in accordance with the relevant waivers obtained under the Senior Secured Noteholder Consent);
(D) an amount equal to €355,000,000, shall be deemed discharged by the Buyer assuming equivalent obligations to the existing obligations of the Seller under or in respect of the Senior Unsecured Note, the Senior Unsecured Notes Indenture and the Intercreditor Agreement, in substitution for the Seller, on such basis as the Seller shall be released from its obligations under such agreements (in accordance with the relevant waivers obtained under the Senior Unsecured Noteholder Consent);
(E) to the extent that any remain outstanding, an amount equal to the Intra-group Seller Debt, shall be deemed discharged by the Buyer assuming such debts under the SPA; and
(F) an amount equal to €200,000,000 as follows:
(1) (subject to sight of the schedule specifying the amounts and payees which has not yet been provided by the Seller and evidence as to the basis upon which amounts are due) by the payment of the Funded Costs Amount, all other transaction costs and restructuring costs incurred by the Buyer and Hellas II plus transfer taxes, stamp duties and other amounts payable in connection with the matters contemplated by the SPA;
(2) payment of the Consent Fees; and
(3) by the provision of liquidity funding of €100,000,000 to WIND Hellas via a subscription by the Buyer for shares in the capital of WIND Hellas or via another appropriate means of funding (see e.g. 6.1), which amount shall be paid in cash by the Buyer to WIND Hellas (and part of which will be made available to the administrators as explained in 6).
3. Transaction Structure
3.1 The Committee has incorporated the Buyer for the purpose of executing the Transaction - SCHO 6 S.A.R.L. The Buyer has been capitalised by the Committee. These commitments can be fully drawn before the appointment of the administrators by order of the Court to that effect made at the hearing scheduled to take place on 26 November 2009.
3.2 In relation to the Senior Note Hedges (to which the WIND Hellas is party), the Buyer intends to keep these in place following completion.
3.3 The Buyer will seek the consent from NBG to any change in control or will buy their loan.
3.4 Jefferies has committed to acquire the RCF debt.
4. Due Diligence
No further due diligence will be required to be conducted.
5. Confirmation of Committed Financing
5.1 Signed funding commitment letters are available with an aggregate amount of financing available to the Buyer (or an entity in the Buyer's group) under the commitment letters, subject to completion of the Transaction, being €450,000,000.
5.2 It is proposed that such funding will be provided to the Buyer:
(A) In the case of the RCF debt, by Jefferies buying such debt; and
(B) In all other cases,
pursuant to a convertible note to be issued by, the Buyer (or an entity in the Buyer's group) which will be drawn prior completion of our client’s final bid.
6. Interim Funding
6.1 Our proposal is for the Buyer to provide the administrators, once appointed, with a line of credit up to €50,000,000, such funding to become an administration expense.
6.2 We have chosen this amount as it is the exact amount of working capital required by the RCF Lenders, as well as being such a significantly large amount that it would provide comfort to trade creditors of WIND Hellas and the directors of WIND Hellas.
6.3 As you can see, such funding can be drawn down by the administrators for lending to WIND Hellas. The Buyer would require security over the cash account into which such funding is deposited as well as over the investments made in WIND Hellas by the administrators. We appreciate that the provision of such security may be a breach of various indentures entered into by Hellas II.
6.4 To the extent that the €50,000,000 is not utilised, it will form part of the €100,000,000 set forth in 2.1(F)(3).
7. Consent Fees and Revised Margin
Senior Secured Notes
Consent fee 300bps (early bird consent fee of 400bps to first 51% consenting)
Cash Margin increase of 1.50%
PIK Margin increase of 1.50%
Senior Unsecured notes
Consent fee 200bps (early bird consent fee of 400bps to first 51%consenting)
Cash Margin increase of 1.50%
PIK Margin increase 1.50%
5% Warrants
8. Internal Approvals
Each of the Members has obtained all of the necessary internal approvals from shareholders, credit committees, investment committees, partners, members, boards of directors, in each case to the extent required to enable them to submit this Final Offer and to proceed to execution and closing of each aspect of the Transaction and any funding for which they are responsible without need for any further consents or approvals. Funding can be drawn even before the administrators are appointed.
9. Conditions and External Approvals
9.1 Anti-trust: Given the composition of the Members and their interests, if any anti-trust filings are considered necessary it is not anticipated that there will be any issues with obtaining any necessary clearances.
9.2 Greek Telecom's Regulatory Consent: Consent from the Hellenic Telecommunications and Post Commission (the "Ministry") is required in relation to any change of control of WIND Hellas. The Committee's consultant (who shall form part of the Committee's management team for WIND Hellas following completion of the Transaction (see further below)) has informed the Committee that during his informal discussions with the President of the Ministry it was stated that the necessary change of control consent will be granted no later than 10 days following formal application being made, but may be granted within approximately 5 days following formal application being made. The Committee's Greek counsel were subsequently invited to attend a meeting at the Ministry at which they were given verbal assurances that consent would be granted within the indicated time frame.
9.3 The Condition relating to the RCF, Senior Secured Notes and Senior Unsecured Notes: In relation to the Condition relating to the RCF, Senior Secured and Senior Unsecured Notes drafted by Denton Wilde Sapte, you will note that the Committee has not made any changes to the proposed approach. The Committee also notes that the Seller is not prepared to solicit formal consents from the holders of the Senior Secured Notes or the Senior Unsecured Notes until a preferred bidder has been selected. We would respectfully suggest that, unlike the previous bid, this important part of the process is honoured in the case of the Final Offer.
10. Timeline
The Committee's full team has been assembled and is prepared to work towards completion of each step in the process on an expedited basis. The Committee is confident that it will be able to execute its bid within a short timeframe and does not envisage any critical path items that may delay progress to completion.
11. Acting and Principal
11.1 Each Member is acting as principal for its own account and is not acting on behalf of any other person with respect to its proposed investment in the Buyer or its involvement in the Transaction.
11.2 An on-sale of all of the shares in WIND Hellas or Hellas IV is not in immediate contemplation.
General
This letter shall be governed and construed under the laws of England and Wales. As is customary with offers of this type, the Final Offer is subject to contract and agreement on the terms of the relevant Transaction Documents. Other than this paragraph which shall be legally binding, it is not intended that any provision of this letter shall create any legally binding obligations or rights, and should not be regarded as an offer capable of giving rise to a contract by means only of acceptance.