Corestate creditors approve modified restructuring concept for convertibles

Chicago, Nov. 28 – Corestate Capital Holding SA announced the results of a bondholder meeting after previously announcing the likely event of a default on its €200 million 1.375% convertible bonds due 2022, according to a notice.

The bondholder meeting covered the soon-maturing bonds due in 2022 and a second convertible bond for €300 million outstanding, which matures on April 15, 2023 (ISIN: DE000A19YDA9). The company had announced that it would also not be able to repay this bond.

Meeting results

The company intends to implement a modifying restructuring concept and expects that, through implementation, it will be able to operate as a going concern in the long term.

An initial step, there will be extension of the bonds due 2022 through April 15, 2023, with the possibility of a further extension.

The company will also exchange €388.4 million of debt for equity, divided proportionally between the two bonds.

The increase to the company’s share capital will need to be approved at the extraordinary general meeting on Dec. 20.

The management board assumes that holders of the bonds will hold approximately 81.25% of the increased capital of Corestate after completion of the capital increase.

The remaining bonds are to be exchanged for new notes of Corestate’s subsidiary, Corestate Capital Group GmbH. The €100 million of new notes will bear interest at 4% cash plus 4% paid in kind and mature on Dec. 30, 2026. The notes will be secured by assets of the Corestate Group and provide for a “number of covenants.”

A group of creditors has agreed to provide up to €25 million in the form of super senior notes to assist the company with the liquidity required to implement the restructuring.

Reorganization

The restructuring includes a comprehensive reorganization of the corporate governance of the group.

An independent chief restructuring officer will be appointed by the management board, who will have a casting vote.

In addition, two members of the supervisory board are to resign from office and be replaced by two supervisory board members appointed by the noteholders, who will be co-opted.

In the future, Corestate is to function only as the holding company of the Corestate Group. The operational functions are to be transferred to a new intermediate company.

The successful implementation of the restructuring concept is still subject to approval of further creditors’ meetings for the bonds that have yet to be convened, the creation of the increased authorized capital, the issuance of the new financing instruments and the implementation of the necessary regulatory procedures.

Corestate is a Luxembourg-based real estate company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.