Idavang works with bondholders, explores sale of Russian business

Chicago, Dec. 13 – Idavang announced that it has been working with its largest bondholders of the €75 million floating-rate senior secured bonds due 2025 (ISIN: DK0030472618) regarding the company’s presence in Russia, according to a press release.

The company is exploring strategic options of the Russian business, including a potential sale of the business.

Currently, Idavang has isolated the activities in Russia, and money is not being transferred from Denmark to Russia, or vice versa.

However, the company is unsure whether the bonds can continue to be serviced in full only by the cash flows from Lithuanian entities.

Bondholders, therefore, are being asked to approve a proposal to amend the bonds.

The first amendment would increase the basket for “permitted factoring” to €6 million from €3 million, in the bond terms.

Additionally, the company would like to amend the cash sweep mechanism, excluding Russian subsidiaries when calculating free cash flow starting Jan. 1, 2022.

Further, in terms of the cash flow sweep, Idavang suggests applying an amount of €4.8 million as excess cash sweep towards redemptions of bonds during the first quarter of 2023 and that such amount will be qualified as an advance payment of future excess cash sweeps whereby in future financial years if and when the free cash flow exceeds €4.8 million the issuer would then be required to carry out an excess cash sweep.

Idavang is also requesting that a disposal of any Russian subsidiaries be classified as a restricted disposal and that the proceeds from any such disposal will be applied towards redemption of the bonds at par as soon as legally practicable.

Idavang is also asking to decrease the interest rate from the time the gross proceeds from a Russian disposal are credited to an escrow account in the European Union. For the first six months, interest would be at 2% and then at 7% thereafter, provided that the funds deposited are at least €40 million.

Holders are being offered a 25 basis points fee as consideration if the proposal is successfully passed, whether they vote in favor or against, or not at all.

The company is attempting to amend the terms via written resolution.

Bondholders representing at least a two-thirds majority of the total number of bonds need to vote in favor of the resolution or a quorum representing at least half of the total number of bonds need to submit a timely response to the summons and the votes cast in favor represent at least a two-thirds majority of the bonds that timely responded.

The voting record date is Dec. 15.

The voting period expires at noon ET on Dec. 28.

The proposed changes would take effect Dec. 28.

Nordic Trustee A/S is the bond trustee (mail@nordictrustee.dk).

Idavang is a pork provider and serves customers in the Demark, Lithuania and Russia.

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