Solocal supports takeover by Ycor; massive dilution in sight

(Boursier.com) — Solocal Group has examined two financial restructuring offers, each proposing a massive reduction in the group’s debt and an injection of liquidity: an offer from bondholders and providing for a liquidity contribution exclusively in debt and an offer emanating from the company Ycor and combining contributions exclusively in capital and industrial synergies.

Solocal supports Ycor’s offer, “the only proposal, at this stage, likely to ensure its sustainability and which can be implemented with the support of senior lenders”, explains the group.

The Ycor Offer provides in particular for substantial contributions exclusively in equity, including a maximum contribution of 40 million euros of new money from Ycor via capital increases with or without maintaining the preferential subscription rights of the shareholders; the potential contribution in kind from Regicom to the Company; the partial repayment, on the effective restructuring date, of part of the existing senior debt with part of the proceeds from the equity contributions mentioned above; a massive reduction in the nominal amount of the Group’s existing gross debt of around 80% with different amortization or conversion into capital terms depending on
the nature of the resettled debts.

Following the transactions contemplated in this offer, the Company would be controlled by Ycor. The current shareholders of Solocal Group would be massively diluted since their existing shares would represent less than 1% of the capital.

Quoting…

For its part, the Stand Alone Offer notably provides for new financing in the form of debt of a maximum amount of 20 million euros (which could potentially be increased); the repayment in cash of part of the senior debt for an amount lower than that of the Ycor Offer, then an additional repayment via the potential proceeds of a capital increase with maintenance of preferential subscription rights; a massive reduction in the nominal amount of the Group’s existing gross debt, including all of the Bonds, with different amortization profiles depending on the nature of the reinstalled debts.

At the end of the operations envisaged in the Stand Alone Offer, the Company would be controlled by the bondholders. The current shareholders of Solocal Group would be massively diluted since their existing shares would represent less than 1% of the capital.