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

By Susanna Moon

Chicago, Dec. 15 – Acme Corp. SIA said it obtained bondholder approval to sell capital shares in subsidiaries Apex Investments SIA and Tukuma Projekts SIA.

The company obtained 3,665 votes out of about the 5,030 total number of the issued and outstanding bonds, according to a company press release.

With the issuer’s affiliated persons Apex Investments owning 100 bonds and Acme owning 400 bonds, the total number of bonds eligible under the vote was 4,490, the press release noted.

Therefore, the company needed to obtain votes from those holding at least 2,993 of the issued and outstanding bonds, or two-thirds of its outstanding bonds.

Holders needed to be of record as of Dec. 5. The solicitation was announced on Nov. 28.

As previously announced, the company also sought consent to repay 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.

Acme 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 was 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.

More transaction details

The transaction contemplates 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.

The transaction will considerably reduce the group’s senior secured debt and is in the interests of the bondholders, the company previously said. The transaction will free up considerable cash flow that will be available to the group to serve Acme’s obligations to bondholders and give the bondholders a loan-to-value ratio below 50%.

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

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