Norske Skog received a recapitalization proposal from a substantial number of the secured holders of the SSN (EUR 290 million, 2019) bond and the NSF (EUR 100 million, 2020) loan, as detailed in the July 28, 2017 stock exchange release.
According to the announcement, to facilitate ongoing discussions with stakeholders and finalization of revised transaction documentation, the deadlines for the existing exchange offers and consent solicitations and the forbearance provided pursuant to the existing short-term standstill agreements with certain creditors, have been extended to August 18, 2017. Both the exchange offers and consent solicitations and the short-term standstill agreements were due to expire on August 11, 2017. The short-term standstill agreements, entered into with certain holders of the SSN and the NSF, provide forbearance in respect of the non-payment of interest payments due in relation to the SSN and NSF, in order to preserve liquidity for the groups’ operating business. The forbearance provided pursuant to these short-term standstill agreements has now been extended to August 18, 2017, by which time it is expected that longer term standstill agreements will be entered into.
The company admitted a strong interest in supporting the group’s operating business has also been expressed by both senior secured creditors and unsecured creditors, with certain members of both groups offering liquidity financing of around EUR 16 million to Norske Skog AS.
Lars P.S. Sperre, President and CEO of Norske Skog, commented:
“We are very pleased that key stakeholders are willing to support the business operations of Norske Skog through liquidity facilities like the offered loans. Our paper mills are highly competitive business units with a prosperous future irrespective of the final solution to the group’s capital structure. We have now secured the operating business by both relief on interest payments and this new financing, and there should be no reason to question the stability of our operating business through the refinancing.
After months of bondholder discussions, it is envisaged that next week we will be able to launch a revised transaction proposal which achieves the main goals set for the recapitalization process, with support from substantial numbers of senior creditors, for due consideration by the other stakeholders of the group. Crucially, the operating businesses of Norske Skog should be well protected through the final stages of the recapitalization process by the provision of fresh liquidity.”
The company will continue to facilitate concluding stakeholder discussions for the launch of a revised transaction proposal next week.
Norske Skog will hold an extraordinary shareholder meeting on August 24, 2017 at 13:00 CET, in order to provide the shareholders with, amongst other things, an update on the financial situation of the group.
Norske Skog launched a recapitalization transaction at the beginning of June 2016. It is expected to significantly reduce the group’s debt level and interest cost, increase the equity value, and position the company to deliver on its future growth strategy.
Earlier, Blackstone’s funds decreased shareholding of Norske Skog below 10%.
About Norske Skog:
The company is a leading producer of newsprint and magazine paper. The company has 9 paper mills around the world.