Cherry seeks bondholder consents to extend timeline for restructuring

By Marisa Wong

Morgantown, W.Va., March 26 – Cherry AB is asking holders of its senior secured bonds 2016/2020 to consent to some waivers and amendments to the terms and conditions of the bonds in order to complete a restructuring.

Cherry said it is looking to consolidate its group structure and streamline its organization and also improve its operational flexibility. Through the proposed amendments, the company will be able to streamline and match its business areas with the group’s legal structure, which is expected to simplify operations and clarify the group’s position as a leading Nordic gaming company.

In addition to the consolidation of the group, Cherry also wants to adjust the covenant structure for the bonds over the coming year. Specifically, the issuer is seeking to adjust the interest cover ratio maintenance test to 2.25 to 1 from 2.75 to 1 for the period ending Dec. 31, 2018.

The changes to the group structure were presented to the bondholders in a previous written procedure in December and were supposed to be implemented no later than March 31. Due to lengthy registration and administrative processes in Malta, the issuer will not be able to complete its plans under the previous written procedure by March 31.

In order to complete restructuring, the issuer is now asking bondholders to consent to, among other things, a waiver of the issuer’s obligations under the previous written procedure to complete the restructuring and related transactions by March 31.

The proposed waivers are conditioned on, among other things, Cherry completing the restructuring and related transactions by Sept. 30, 2018.

Holders of record as of March 29 may participate in the current written procedure. The deadline for submitting voting instructions is noon ET on April 16.

The proposal requires consents from holders of two-thirds of the bonds.

Holders of at least 20% of the bonds must participate in the written procedure in order to form a quorum. Lacking a quorum, there will be second written procedure with no quorum requirement.

There is currently €179,887,500 of the bonds outstanding.

Nordic Trustee & Agency AB is the agent.

Cherry is a gaming company based in Stockholm.

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