Dignity Finance starts consent solicitation for financial flexibility

Chicago, Sept. 7 – Dignity Finance plc, subsidiary of Dignity plc, launched a consent solicitation with noteholders, according to an announcement by the parent company.

Dignity is seeking certain consents from noteholders for a potential transaction involving the realization of value from selected crematoria assets, with the proceeds being applied in a partial redemption of the company’s class A notes.

If approved, the consents will apply for 12 months.

Dignity is also seeking a series of amendments to provisions within the financing documents in order to provide operational flexibilities and to bring the Dignity financing structure more in line with recent securitization procedures.

As a condition to this consent proposal, Dignity will be required to inject a minimum of £70 million into the securitization group companies to partially repay some of the class A notes outstanding (including the payment of a redemption premium) in consideration for assets leaving the securitization group, if a potential transaction in relation to the crematoria assets becomes unconditional within 12 months of the class A noteholders' approval referred to above. This will result in a deleveraging of the Group and a positive impact on the underlying financial ratios.

The assets which are subject to the proposals are seven crematoria where the freehold and leasehold properties are owned by companies outside of the securitization group and leased to Dignity Funerals Ltd. (a company in the financing ringfence).

The portfolio is expected to generate a total of £6.7 million EBITDA (2022 budget) for the group. As part of any potential transaction involving these crematoria assets, Dignity may enter into an agreement to continue to operate these assets.

The consent proposal has been considered by a special committee consisting of noteholders and convened by The Investment Association at the request of Dignity Finance. The members of the special committee, who hold in aggregate approximately 61% of the current principal amount outstanding of the class A notes have examined the proposal and have informed Dignity Finance that they find it acceptable.

Dignity plc is a Sutton Coalfield, England-based holding company. The company, along with its subsidiaries, provides funeral services.

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