Adler Group reaches a binding agreement with bondholders for a comprehensive recapitalisation

• Reprofiling of maturities extends runway for orderly disposal of assets
• Equity to be stabilized through conversion of most of the 2L Notes into Perpetual Notes with terms consistent with equity classification under IFRS
• Additional liquidity of up to €350m provided in the form of new money and ability to retain disposal proceeds
• Bondholders to hold 75% of total voting rights
• Consent solicitation and extraordinary General Meeting to approve and implement the agreement

Luxembourg, 24 May 2024 – Adler Group S.A. (“Adler Group” and together with its subsidiaries, the “Group”) announces that it has entered into a binding agreement (the “Lock-Up Agreement”) with a steering committee of bondholders (the “Steerco”) supporting a comprehensive recapitalisation of the Group. The Lock-Up Agreement has been signed by bondholders representing more than 60% of the 2L Senior Secured Notes (“2L Notes”) issued by Adler Group`s subsidiary AGPS BondCo plc. Other bondholders that intend to support the recapitalisation of the Group can accede to the Lock-Up Agreement.

“I’m pleased that we have accomplished an agreement with the majority of our bondholders which provides us with an extended runway to execute our strategy and avoid unnecessary asset disposals far below their fair values”, comments Thierry Beaudemoulin, CEO of Adler Group. “The agreement follows our intensive business review considering the adverse market conditions that have persisted longer than anticipated. I’m particularly thankful to our teams that have delivered strong performances in transactions, operations, and financial planning during challenging times.”

First component of the agreement is the extension of the existing Group debt maturities to December 2028, December 2029, and January 2030. Second component is the strengthening of Adler Group’s equity by c. €2.3bn which is expected to be achieved through the conversion of most of the existing 2L Notes into subordinated Perpetual Notes with terms consistent with equity classification under IFRS, thereby stabilising the Group’s balance sheet. Together with the remaining reinstated 2L Notes of €700m, the Perpetual Notes form new notes, totalling c. €3bn. Furthermore, Adler Group will be provided with up to €100m of fresh money through an increase of the existing 1L New Money facility provided by a special purpose vehicle at the initiative of the bondholders. Additionally, the finance documents will provide for the ability to hold back disposal proceeds of up to €250m realised from April 2024, which would otherwise be applied in mandatory repayment of the existing 1L New Money facility.

As part of the recapitalization transaction, bondholders will receive the majority in Adler Group’s voting rights. Following the implementation of the transaction, all outstanding common shares are to represent 25% of Adler Group’s total voting rights. The remaining 75% of total voting rights will be represented by the bondholders. All common shares continue to represent 100% of Adler Group’s dividend distribution rights. Additionally, Adler Group will be permitted under the Perpetual Notes to pay a dividend of up to 2.5% of the amount of any payments made to the Perpetual Notes from the date the reinstated 2L Notes are fully discharged.

“The entire Board of Directors welcomes the agreement with our supporting bondholders, as it is a fair balance between the interests of all stakeholders involved”, comments Stefan Brendgen, Chairman of the Board of Directors of Adler Group. “The last couple of months have been very intense but the outcome is more than worth it. Adler Group can now continue its path into a new normal with focus, stability, and enthusiasm. We as the Board would like to thank our Senior Management, its teams and advisers and everyone who has been involved in that great work.”

Next steps

In order to implement the transaction, AGPS BondCo plc will shortly launch a consent solicitation. Simultaneously, AGPS BondCo plc will launch a UK restructuring plan in case that the requisite consent to implement the transaction is not received via the consent solicitation. In addition, Adler Group will convene an extraordinary General Meeting in due course. Adler Group expects the comprehensive recapitalisation transaction to be implemented and concluded by end of September 2024 or shortly thereafter.

Cleansing Materials

For further and detailed information, Adler Group refers to its Ad-hoc announcement from today and the Investor Update document published on the Group’s website (https://www.adler-group.com/en/investors/publications/other-publications).

Further Information:

Institutional investors may contact PJT Partners (Attention Tom Campbell, Edward Ball, Jakob Schrandt Email: pjt_project_steel_core@pjtpartners.com), financial advisor to Adler Group, Houlihan Lokey (ProjectJupiterHL2023@hl.com), financial advisor to the SteerCo, or the Calculation Agent (Kroll Issuer Services Limited, Attention: Illia Vyshenskyi, Paul Kamminga, Email: adler@is.kroll.com, Website: https://deals.is.kroll.com/adler).

Important notice

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities.

Neither this announcement nor the publication in which it is contained is for publication or distribution, directly or indirectly, in whole or in part, in or into the United States of America, including its territories and possessions, any state of the United States (the “United States”). The information in this announcement does not contain or constitute an offer to acquire, subscribe or otherwise trade in securities of Adler Group in any jurisdiction. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction of the United States, and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or otherwise transferred, directly or indirectly, in or into the United States absent such registration, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act, in each case in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the securities in the United States or in any other jurisdiction.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions. Forward-looking statements speak only as of the date they are made.

These forward-looking statements are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Adler Group does not undertake any responsibility to update the forward-looking statements in this release.

No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

Contact

Investor Relations:
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