(Leveraged Commentary & Data - LDC) Frigoglass shareholders retain stake as lenders agree restructuring plan
07-Mar-2023 06:53:39 EST
By: Thomas Beeton
Frigoglass shareholders are set to maintain a significant minority stake in the company after lenders agreed to a restructuring deal for theGreek glass and cooler manufacturer.
In a statement yesterday, the company said the committee representing holders of its 2025 bonds will enforce the pledge over shares ofFrigoinvest Holdings B.V. and as a result take an 85% stake in Frigoglass via a “New DebtCo.”
Shareholders led by Truad Verwaltungs — the family trust of the late businessman Anastasios George Leventis — will however retain asubstantial investment in the company through a 15% stake in the debtco.
“It’s a recognition of the fact that you need the family onboard to fix future problems, because they know the company and control itssurroundings,” said Wolfgang Felix, co-founder of independent credit analysis firm Sarria, who had expected the family office to take astake in the high single digits.
Rated CC/Ca, Frigoglass is an international producer of ice coolers and glass containers, with a leading position in West Africa. Therestructuring comes after Frigoglass bonds collapsed under huge pressure from the company’s exposure to Russia and Ukraine,exacerbating operational pressures following a June 2021 fire at the group’s Romania plant.
In December , Frigoglass announced a restructuring deal whereby €95 million of its 6.875% 2025 bonds were exchanged for a total equityof the Frigoinvest holding company, with the remaining set to be reinstated for €165 million of bonds with a five-year maturity.
“Unusually, that decision [on ownership] was left until the end of the negotiations, with the principle from the outset being that bondholderstake control of the business,” Felix said.
As part of the restructuring deal outlined in December, creditors representing 56.9% of the company’s €260 million of 2025 bonds agreed toprovide up to €55 million of bridge notes with a senior ranking to the bonds, which ensured Frigoglass could continue operating until its Romanian plant reopens in the first quarter of this year.
Frigoglass has this year made full use of the facility, and in February agreed terms with its lenders which saw the new €165 million five-yearnotes decreased to €150 million, with the interest rate amended to 3% cash and 8% pay-if-you-can. Last week, Frigoglass confirmed it had not repaid the bridge facility before the Feb. 28 maturity, paving the way for bondholders to enforce the share pledge over the Frigoinvestholding company.
In addition to the new ownership structure — which is expected to be implemented from April 13 — bondholders have also agreed toprovide a further €75 million of super-senior notes which will be issued from the debtco. Creditors have also agreed to amend milestonesand certain provisions “to reflect the consensual nature” of the deal, Frigoglass said in its statement.
As outlined in its update in February, as well as the partial equitization of the notes, the remaining balance of the 2025 bonds will also bereinstated as €150 million of new second lien secured notes at the debtco.
Perella Weinberg Partners is financial adviser to Frigoglass, while Milbank and Kyriakides Georgopoulos are legal counsel on internationaland Greek law, respectively. Bondholders are advised by DC Advisory and ALPHACAP Partners as financial advisors, and law firms Weil,Gotshal & Manges and Karatzas Partners. Follow Us © 2023 PitchBook. Win what's next. All rights reserved.