Func Food gets holder OK to defer interest on 9% bonds until 2019

By Susanna Moon

Chicago, Jan. 23 – Func Food Group Oyj secured the needed approval to amend its up to €50 million 9% senior secured bonds due June 26, 2019 by way of written procedure.

There were enough votes to form a quorum, and more than 66 2/3% of the adjusted nominal amount voted in favor of the amendments, according to a notice by Nordic Trustee & Agency AB (publ) as agent.

As announced Dec. 20, the issuer was asking to amend the notes by way of a new written procedure until 11 a.m. ET on Jan. 22 and pulled the bid that had been set to run for a month until 11 a.m. ET on Jan. 10. The record date is Jan. 2.

The issuer was asking to defer interest due Dec. 26 until maturity.

The company has faced “headwinds” in its industry amid “a rapid decline in manufacturer margins on single-ingredient offerings,” the previous release noted.

Along with other efforts, the company’s owners were holding talks with a potential buyer and under the terms of the deal, “all stakeholders are set to benefit through a potential divestment of shares at a valuation level significantly exceeding the current trading levels of the bonds.”

The deal would allow the issuer “to stabilize operations and increase growth focus with a more efficient portfolio.”

To achieve its goals, the issuer was asking holders to waive the requirement to pay interest on Dec. 26.

In return, the issuer was offering a waiver fee of 1%.

To form a quorum, bondholders representing at least 20% of the adjusted nominal amount needed to reply to the request. A majority required at least 66 2/3% of the adjusted nominal amount.

For questions, please contact the agent at voting.sweden@nordictrustee.com or +46 8 783 79 00.

Previous terms

In the previous bid dated Dec. 10, Func Food was asking to waive interest payments on Dec. 26 and March 26 with the amount instead to be paid at maturity.

Voting forms were due by 11 a.m. ET on Jan. 10.

“The issuer is undergoing a shift in portfolio focus from traditional single-ingredient (powder) sports nutrition- and superfoods- products to convenience-driven and ready-to eat / ready-to-drink solutions while the market has seen a rapid decline in manufacturer margins on single-ingredient offerings,” the previous release noted.

“Given current market dynamics, the issuer would like to maximize investments behind strategic initiatives and maintain momentum for a business turnaround in the core markets.”

The notes were issued in 2015.

Func Food Group is based in Tampere, Finland.

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