Latvia’s Acme seeks bondholder OK to sell subsidiaries, repay debt

By Toni Weeks

San Luis Obispo, Calif., Dec. 1 – Acme Corp. SIA is seeking approval from its bondholders representing two-thirds of the company’s outstanding bonds (ISIN LV0000800787) to sell capital shares in subsidiaries Apex Investments SIA and Tukuma Projekts SIA. Bondholders of record as of Dec. 5 are being asked to vote on the transaction.

The company also seeks consent to repay existing loans from any affiliated persons; invest in shares of other companies, unless the amount invested in a single company is at least 51% of its share capital; increase or decrease its share capital; grant any loans except to other companies in the group or issue any guarantees; receive new loans or increase the amount of existing loans from credit institutions; and enter any transactions with an affiliated persons unless the transactions are executed on an arm’s length.

According to a company notice, Acme has entered into a share purchase agreement with Hili Properties BV to sell all the capital shares of Apex and Tukuma. Besides the condition that approval for the sale be given by the bondholders, the transaction is also conditional on releasing security interests attached to the shares in the companies and restructuring all current intragroup and external liabilities so that at closing there are no inter-company receivables between the two subsidiaries and Acme’s remaining group nor any cross-securities or cross-guarantees by the companies securing liabilities of the issuer’s remaining group and vice versa.

The transaction contemplates, inter alia that

• The intra-group loan granted by Acme to Apex is repaid on or prior to the closing of the transaction;

• The bonds held by Apex have been transferred to the issuer;

• The current intra-group loans granted by Apex to Neatkariga Patentu Agentura SIA (NPA) and Big Truck SIA are repaid to Apex;

• Current loans of €420,752 from each of David DeRousse and Gerald Wirth are repaid partly or fully by the subsidiaries or transferred to Acme at their outstanding amount on or prior to the closing of the transaction;

• The senior secured loans from Swedbank AS will be retained by the subsidiaries while all security interests and guarantees provided by the issuer, NPA and Big Truck to secure the senior loans granted by Swedbank to the subsidiaries will be released effective on closing of the transaction;

• The security interests and guarantees provided by the companies to secure the senior secured loans granted by Swedbank to NPA will be released effect on the closing of the transaction;

• The senior loan agreement between NPA and Swedbank will be restated to reflect the change in collateral securing NPA’s obligations and other changes connected to the transaction; and

• The real estate currently owned by Apex at Slokas Street 161, Riga, Rica City will be retained by the issuer’s group and transferred by Apex on arm’s length basis to a newly established subsidiary of Acme, Slokas SIA, and all current security interests established on the property will secure the senior secured loans granted to the subsidiaries will be released. Following the transaction, Slokas will continue the same business line currently carried out by Apex in the Slokas property.

The shares will be sold at a price based on the net asset value of the companies as of Dec. 31.

The transaction will be financed fully or in part by a loan to Hili from Swedbank, the filing said. In addition, Swedbank is expected to provide a €500,000 senior secured loan to Slokas SIA to finance the acquisition of Slokas real estate and for working capital.

If the conditions are satisfied, settlement is expected Jan. 6.

According to the filing, the transaction will considerably reduce the group’s senior secured debt. Acme considers the transaction to be in the interests of the bondholders, freeing up considerable cash flow that will be available to the group to serve Acme’s obligations to bondholders and giving the bondholders a loan-to-value ratio below 50%.

Bondholders may vote until Dec. 12.

Questions may be addressed to David DeRousse, chairman of the board of Acme, (371 67 333 504 or info@rbm.lv).

Riga, Latvia-based Acme and its subsidiaries operate and manage rental real estate properties in Latvia.

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