Ymagis reaches restructuring agreement with bondholders and lenders

By Caroline Salls

Pittsburgh, Dec. 2 – Ymagis Group announced Monday that it has reached an agreement with all its bondholders and bank creditors for a financial restructuring plan.

According to a news release, the agreement meets the three objectives set by the company during talks with its creditors, including reducing the total amount of the group’s net financial debt, further strengthening the capital of the company and the group and rescheduling the repayment of residual debt.

The restructuring agreement has been unanimously approved by Ymagis’ bondholders and bank creditors.

The company said the agreement safeguards its interests by maintaining the integrity of the group, providing a sustainable framework for its activities, its employees and its customers, and offering the current shareholders the opportunity to participate in the recovery.

Ymagis said €52.1 million in debt is covered by the restructuring agreement. That debt will be written off, converted or rescheduled.

A total of €23 million of the debt will be subject to a write-off of between €13.9 million and €16.2 million and an exchange of €6.9 million of debt, which will be rescheduled over the period from 2020 to 2022.

Debt exchange

A total of €9.2 million will be exchanged for convertible bonds that can be bought back by the company. Each ORAR bond will have a value of €1,000 and will be redeemed on Sept. 30, 2024 into 333 ordinary company shares.

Ymagis will have the right to buy back all or part of the ORAR bonds in cash under conditions linked in particular to its available liquidity, and the bondholders, subject to a 12-month lock-up period, will have the right to decide to convert their ORAR bonds twice a year at the end of the 18-month period following their issue.

The ORAR bonds will accrue interest at 3%, payable through the transfer of five new or existing shares per ORAR bond every six months.

A total of €16.6 million of the debt will be rescheduled, with maturities in 2023 and 2024 with a possible extension to 2025 if no refinancing has been put in place by 2024.

A total of €3.2 million will be repayable by the company in 2026, with a possible extension of maturity until 2027.

Sale-based conditions

The company said creditors holding a total of €500,000 of senior debt have also opted for early repayment if a sale proceeds waterfall is put in place, with this early repayment to be automatically accompanied by a write-off of 80% of this debt for Ymagis.

Existing shareholders will be entitled to a free award of one equity warrant for each existing ordinary share, with two warrants allowing them to subscribe for one new ordinary share at a price of €3 per ordinary share.

If the company sells assets, up to a total of €7 million of proceeds will remain under the company’s control to cover operational financing needs; any amount above the first €7 million will be allocated first to the early repayment of the super senior debt, representing a maximum of €6.9 million, and then to the early repayment of the non-written off share of the senior debt with super senior option, representing €100,000; any amount exceeding these first amounts will be allocated based on 50% to the early repayment of the senior debt, with the balance remaining under the company’s control to finance its development.

Next steps

Ymagis said the agreement allows it to significantly reduce its net financial debt to reach levels that will enable it to continue moving forward with its development, specifically allowing the company to manage the development of CinemaNext, continue with the rationalization of Eclair, while looking into relevant partnerships for this entity’s various activities, and accelerate the development of Illucity, primarily through a licensing policy with partners.

The agreement remains subject to the finalization of the documentation required for the issuing of new convertible bonds and the issuing of equity warrants, as well as approval by a general meeting of shareholders, which will be held within the next few weeks, and approval by the Paris Commercial Court.

If the applicable conditions are met or waived, the restructuring agreement will take effect by Feb. 29.

As requested by the company, trading of Ymagis shares was suspended on Nov. 25, but the company said it asked Euronext Paris today to resume trading in its shares for start of trading on the Paris stock market on Dec. 3.

The Paris-based issuer specializes in digital technology for the movie industry.

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