Following intensive efforts and extensive negotiations over several months on the part of Management targeting at finalising the terms of the financial restructuring of the Company’s existing debt and securing new funding to improve liquidity and meet future working capital requirements, Aristovoulos G. Petzetakis S.A. has as of today’s date and with the knowledge of its Lenders, entered into a binding Memorandum of Understanding with four Investment Funds and its main shareholder realising the above targets and providing specifically for the following:

(1)  New bond loans, fully covered by the 4 Investment Funds, namely:

(a)  a common bond loan of € 7.0 ml. with a 4-months’ term as interim financing to cover the Company’s immediate working capital requirements, and

(b)  convertible bond loans totaling at € 17.5 ml. with a 3-years’ term as medium term financing to refinance the above € 7.0 ml interim financing and meet future working capital requirements. In case of conversion of these bond loans, they will account for up to 35% of Company’s equity on a fully diluted basis. Upon achievement of specific group EBITDA targets, Management will have the right to receive convertible bonds accounting for up to 7.5% of the Company’s equity on a fully diluted basis upon conversion.

(2)  Refinancing of the Company’s existing bank debt totalling approximately € 99 ml. will be achieved via the following:

(a)  A new zero coupon convertible bond loan of € 22.9 ml. with a 5-years’ term to refinance overdue bank debt. In case of conversion, this bond loan will account for up to 20% of Company’s equity on a fully diluted basis. Lenders’ subscription to the above bond loan will be on a proportionate basis to their existing debt holdings in the Company. Lenders are defined as Bank Lenders and Investment Funds, to which some of the Banks have transferred their debt claims towards the Company. The Company and/or the main shareholder will have the right to purchase the unconverted portion of the above bond loan at its maturity at a pre-agreed price, which is determined on the basis of achieved group EBITDA results.

(b)  The refinancing of the Company’s remaining debt of approx. € 76.0 ml. over a period of 8 years, with the participation of all Lenders that hold debt claims towards the Company.

The completion of the above agreements is subject to certain conditions, the execution of legally binding documentation and obtaining all necessary final approvals of the Lenders, the Company’s bodies and the Regulatory Authorities. This comprehensive financial restructuring of the Company’s debt obligations rewards, not only the Management’s efforts, but, also, its strategy and persistence in securing a solution that:

1.      Preserves the existing business of the Company as a whole and maintains its geographic coverage.

2.      Potentially reduces existing bank debt of the Company and restructures the remaining debt balance over the next 8 years on favorable terms.

3.      Injects new funding into the Company to cover existing and future working capital requirements.

4.      Secures the interests of both the Company and its shareholders. The structure of the convertible bond loans (€ 17.5 ml. and € 22.9 ml) in conjunction with their phased conversion rights over a period of 3-5 years allows the Company to fully realise its operational capabilities on a fully funded basis and with a potential reduction in overall bank debt, thus achieving results that will benefit both current and future shareholders.

The above agreement represents a milestone for the financial restructuring and the future development of the Company, as it restores its financial stability and substantially strengthens its balance sheet whilst, at the same time, provides for a strong focus and push of its business operations in all strategic areas, where the Company is presently the market leader.

 

Petzetakis Group profile:

Petzetakis Group is the market leader in both the hoses business in Europe and South Africa and the pipes business in Greece and South Africa. It is the largest producer of plastic pipes, hoses and fittings in Greece being historically the first Greek multinational company. It currently operates 9 production sites in Europe and South Africa with 15 affiliates in 10 countries and trading presence in more than 80 countries worldwide.