BrightHouse extends exchange offer for 7 7/8% notes by one week

By Marisa Wong

Morgantown, W.Va., Jan. 23 – BrightHouse Group plc extended the expiration time for its previously announced exchange offer and consent solicitation to refinance its 7 7/8% senior secured notes due May 2018.

The exchange offer and consent solicitation will now expire at 11:59 p.m. ET on Jan. 30, extended from 11:59 p.m. ET on Jan. 23, according to a company announcement.

The settlement date was also pushed back to Feb. 2 from Jan. 26.

The company said it is extending the deadline for more time to satisfy the conditions to the exchange offer and consent solicitation.

As announced on Dec. 19, the offer and solicitation are subject to conditions, including the tender of at least 90% of the outstanding notes.

For each £1,000 principal amount of existing notes, holders will receive £487.3091 of new 9% senior secured guaranteed notes due May 2023 plus accrued interest on the existing notes payable in new notes and either £245 in cash or new shares.

In the consent solicitation, the company is asking for the waiver of events of default and the removal of substantially all the restrictive covenants and other obligations from the indenture for the existing notes. It is also asking holders to forfeit accrued interest and principal on notes not tendered and to move up the maturity date to the settlement date of the tender offer from May 15, 2018.

Tenders will be deemed to be accompanied by consents and consents cannot be delivered without tendering.

BrightHouse previously said holders of more than 95% of the existing notes have signed on to a restructuring support agreement.

Launch of the offer followed an announcement on Dec. 8 that the company had entered into an agreement with holders of more than 90% of the 7 7/8% notes and its current majority owner, comprised of some Vision Capital funds, to refinance the notes.

Once implemented, BrightHouse said its external debt would be reduced by roughly half and its debt maturity extended by five years.

“With a new capital structure, we can focus on delivering our agreed business plan and returning the company to growth,” BrightHouse chief executive officer Hamish Paton said in a previous announcement.

The company said the agreement provides for the existing notes to be released and fully discharged in exchange for £107.2 million of new 9% senior secured guaranteed notes due May 2023.

The 9% coupon is fully payable in-kind for the first year and will become 5% PIK and 4% cash pay thereafter, with a PIK toggle for the cash pay portion if the average cash balance of BrightHouse and its affiliates is £15 million or less.

The new notes will be non-callable for the first year and can be redeemed at par plus accrued interest after that.

The new notes also allow the group to enter into new super-senior ranking debt of up to £35 million.

Existing noteholders who acceded to the agreement by Dec. 15 will receive a share of £4,467,000, payable in new notes, as an early bird consent fee. This fee is equal to 2% of the existing notes.

In addition, existing noteholders will receive either a cash payment or a share of 97% of the group’s new ordinary shares, with the balance going to Vision Capital.

Existing noteholders who do not elect to receive new ordinary shares will instead receive a cash payment at a pre-determined price of £245 per £1,000 of existing notes.

The company said shareholders holding 10% or more of the new ordinary shares will potentially have director appointment rights and the right to receive B shares on specified vesting dates.

BrightHouse said its chairman and executive and non-executive directors agreed to continue in their current roles during a transition period.

The B shares provide for 25% of equity value over £110 million to accrue to the B shares at the time of an exit event.

BrightHouse said the new ordinary shares are subject to a dilution of up to 10% for a management incentive program.

According to the Dec. 8 announcement, the sale process announced by the company on Sept. 28 will not continue.

BrightHouse said it generated revenues of £21.7 million and EBITDA of £800,000 in October.

The cash balance at the end of October was £52.6 million, of which restricted cash was £3.8 million, predominantly related to cash held at the group’s Maltese Insurance subsidiaries.

BrightHouse is a Watford, England-based rent-to-own business.

© 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.