Positioning for post-COVID future – Proposed Restructuring Plan pursuant to Part 26A of the Companies Act 2006
ZURICH Glattbrugg, December 11, 2020
As announced on 26 November 2020, gategroup Holding AG ("gategroup" or the "Company" and together with its subsidiaries, the "Group"), its shareholders, RRJ Capital and Temasek (the "Shareholders") and all of the Group’s bank lenders under the senior facilities agreement dated 30 November 2018 (the "Senior Lenders" and the "SFA", respectively) have agreed to the key terms and conditions of a recapitalisation of the Company (the “Recapitalisation”) and amendment of the terms of the Group’s financial indebtedness (the “Transaction”).
The Company and gategroup Finance (Luxembourg) S.A. (the "Issuer"), as issuer of the gategroup Finance (Luxembourg) S.A. CHF 350,000,000 3% bonds due 2022 (the "Bonds"), are pleased to announce that, in order to implement certain aspects of the Transaction, gategroup Guarantee Limited (the "Plan Company"), a wholly owned subsidiary of the Company, intends to propose an English restructuring plan under Part 26A of the United Kingdom's Companies Act 2006 (the "Plan"). To this effect, the Plan Company has today issued a "Practice Statement Letter" to formally notify the holders of the Bonds (the "Bondholders") and the Senior Lenders of the Plan Company's intention to pursue the Plan, and thereby to propose to:
- the Bondholders that (i) the maturity of the Bonds will be extended by 5 years to 28 February 2027 and (ii) the rights of Bondholders as a result of a change of control event under the Bond terms upon Temasek and/or any of its affiliates acquiring more than 50% of the shares or voting rights in gategroup, will be waived. No other changes to the Bonds are being proposed and interest will continue to be payable in cash at the current interest rate; and
- the Senior Lenders that (i) the maturity of the Group's facilities under the SFA will be extended by 5 years to 20 October 2026 and (ii) certain other technical amendments will be made to the SFA. The interest rate applicable to loans outstanding under the SFA will remain unchanged (although certain margin step-up provisions will no longer apply) but, subject to certain conditions, the borrowers under the SFA may elect to capitalize all or part of the interest.
Among other things, the Practice Statement Letter contains further, important details on the Transaction and the Plan, and explains that the Plan Company expects that the first hearing before the English court in relation to the Plan will be held on or about 15 January 2021.
Further details of the Plan and information on how creditors can vote on the Plan will be shared with the Bondholders and Senior Lenders in the coming weeks. The Plan Company expects completion of the Plan process to occur in Q1 2021.
Bondholders have today been contacted and informed about the issuance of the Practice Statement Letter to them by way of an "official notice" published by SIX Swiss Exchange, pursuant to condition 12 of the terms of the Bonds. This official notice is available at https://www.six-group.com/en/products-services/the-swiss-stock-exchange/market-data/news-tools/official-notices.html#/.
It is important that Bondholders read the Practice Statement Letter carefully, and Bondholders are strongly encouraged to participate in the Plan proceedings. Bondholders can obtain a copy of the Practice Statement Letter on the plan portal, which can be accessed once registered on the Plan Website at https://glas.agency/investor_reporting/gategroup/, or by contacting the Information Agent, GLAS Specialist Services Limited, using the details below:
|GLAS Specialist Services Limited
45 Ludgate Hill
Telephone: +44 (0)20 3597 2940
If the Plan is not successfully implemented, the Company considers that the relevant alternative would be an insolvency and liquidation of the Company and other members of the Group. In such circumstances, and based on the current figures resulting from the analysis performed by the financial advisor to the Company and other members of the Group, it is expected that the Bondholders would recover only a very small fraction of their claim against the Issuer and the Company. Whilst no assurance can be given that (even if the Transaction is successfully completed) the Group's business will be successful in the future, such insolvency and liquidation is likely to result in substantial losses for the Plan Creditors, as compared to their likely recoveries were the Transaction to be implemented.
As of 7 December 2020, the Issuer established a new primary office at, and moved its principal place of business from Luxembourg to, 33 St. James’s Square, London, SW1Y 4JS, England. The establishment of the Issuer's new primary office, and movement of its principal place of business was publicly announced by the Issuer to its stakeholders, including the Bondholders, on 8 December 2020.
The Bondholders and all other interested parties, including other creditors of the Issuer, are therefore advised that all correspondence, notices, requests, applications and other documents for the attention of the Issuer should be directed to:
|33 St. James’s Square
+41 44 533 70 00
gategroup is the global leader in airline catering, retail-on-board and hospitality products and services. gategroup provides passengers with superior culinary and retail experiences, leveraging innovation and advanced technology solutions. Headquartered in Zurich, Switzerland, gategroup delivers operational excellence through the most extensive catering network in the aviation industry, serving more than 700 million passengers annually from over 200 operating units in over 60 countries/territories across all continents. In 2019, gategroup reached CHF 4.9 billion in revenues generated by approximately 43,000 employees worldwide. For further information, please visit www.gategroup.com.
This publication contains forward-looking statements and other statements that are not historical facts. The words “believe”, “anticipate”, “plan”, “expect”, “project”, “estimate”, “predict”, “intend”, “target”, “assume”, “may”, “will” “could” and similar expression are intended to identify such forward-looking statements. Such statements are made on the basis of assumptions and expectations that we believe to be reasonable as of the date of this publication but may prove to be erroneous and are subject to a variety of significant uncertainties that could cause actual results to differ materially from those expressed in forward looking statements. Among these factors are changes in overall economic conditions, changes in demand for our products, changes in the demand for, or price of, oil, risk of terrorism, war, geopolitical or other exogenous shocks to the airline sector, risks of increased competition, manufacturing and product development risks, loss of key customers, changes in government regulations, foreign and domestic political and legislative risks, risks associated with foreign operations and foreign currency exchange rates and controls, strikes, embargoes, weather-related risks and other risks and uncertainties. We therefore caution investors and prospective investors against relying on any of these forward-looking statements. We assume no obligation to update forward-looking statements or to update the reasons for which actual results could differ materially from those anticipated in such forward-looking statements, except as required by law.