2008

 30/01/2008 - Announcement for completion of the Company’s financial restructuring and the placing of new bonds to international investors

Hellenic Industry of Plastics and Rubber, Aristovolos G. Petzetakis S.A. (the Company) announces the completion of the Company’s financial restructuring and the placing of new bonds to international investors. The agreement was reached between the Company, its subsidiaries, its principal shareholder and its bank creditors and foreign investors (the Lenders) owning Company’s debt obligations for a € 104.4 mln bank debt restructuring and a € 17.5 mln new financing.

The said agreement, which totals € 121,91 mln, represents a major milestone in the future development of the Company and the Group as it significantly improves the Company’s financial ratios and provides the Company with the strength to further develop its leading market positions.

The debt restructuring and the new financing agreements (to be closed shortly) represent the fulfillment of the terms and conditions set out in the Memorandum of Understanding dated 28.6.2007 between the Company, its principal shareholder and foreign investors and comprise:

·        Two convertible bond loans:

One € 17.5 mln, 3 years’, 7% new money convertible bond loan secured with the shares of the Company’s subsidiary ‘Petzetakis Northern Greece S.A.’ and offered at a 8.06% discount, which will be fully subscribed by funds managed by the international investors Credit Renaissance Partners and P. Schoenfeld Asset Management and by the international investment bank Credit Suisse, with National Bank of Greece as Bondholder Agent. In case of full conversion, the new money convertible will account for up to 33.00% of the total share capital of the Company; and

One € 1.4 mln, 3 years’, unsecured, interest free management convertible bond loan, based on the achievement of predetermined consolidated EBITDA targets, in which case Company’s Management will have the right to receive the bonds, which in case of full conversion account for up to 7.50% of the total share capital of the Company, otherwise the bonds lapse, are no longer convertible into any shares and are immediately returned to Company for cancellation at no cost to the Company.

The total proceeds of € 17.5 mln of these loans will be used to pay various expenses, for working capital purposes and to repay the interim bond loan of € 7 mln issued by the Company on 6.8.2007.

·        One € 80.33 mln, 8 years’ floating rate bond loan, which will be fully subscribed by the Lenders with National Bank of Greece as Bondholder Agent. This bond loan is secured against the real estate property of the Company, shares in five of the Company’s subsidiaries and a lien on the machinery and equipment of the Company. The proceeds of this loan will be used to repay existing matured bank debt obligations of the Company. 

·        One € 24.07 mln, 5 years’, interest free debt capitalisation convertible bond, which will be fully subscribed by the Lenders with National Bank of Greece as Bondholder Agent. This bond loan is secured only in case of acceleration under the above € 80.33 mln bond loan with a second lien over the securities provided for the € 80.33 mln bond loan. In case of full conversion, the debt capitalization convertible will account for up to 19% of the total share capital of the Company. The proceeds of this loan will be used to repay existing matured bank debt obligations of the Company. The Company and/or its principal shareholder have the option to purchase the unconverted portion of this bond loan 1 month prior to maturity at a pre-agreed price based on the achievement of predetermined consolidated EBITDA targets.

Based on the terms of the Subscription Agreement to the above bond issues, all Lenders will sign the above agreements by 4.2.2008. The issue of the above bond loans is scheduled to be completed during February in order to allow time for the registration of the related securities. In parallel with this process and after the completion of the said issue, the Company will request the lifting of the restrictions currently placed on the trading of its shares by the Athens Stock Exchange, since on 2.8.2006 the Board of the Athens Stock Exchange (based on Rule 212 of its Regulation) decided to place trading in the Company’s shares under the supervision category due to the existence of significant overdue debt obligations.

The achievement of the above debt restructuring and new financing plan ensures the following:

1.      Maintains all of the Company’s businesses across all its areas of geographic presence;

2.      Provides for the reduction of the Company’s existing debt and reschedules its existing debt obligations on favourable terms with a long term maturity;

3.      Provides for the inflow of new money to cover the Company’s working capital requirements;

4.      Secures the interests of the Company and all of its shareholders. The structure of the convertible bond loans in conjunction with their gradual conversion over a 3-5 years’ period allows the Company to fully develop its business potential using the new working capital whilst having the advantage of a reduced debt level in order to achieve its targeted results for the benefit of all its shareholders, both old and new.

Commenting on the restructuring, Mr. George Petzetakis, Chairman of the Board of Directors, said ‘This is an important stepping stone for the Company and our Group. It allows me and the Management to turn our attention to the growing business opportunities that we are already seeking and we look forward to the next few years of continued growth and financial strength’.

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