Gategroup Holdings has announced that its shareholders, RRJ Capital and Temasek, and all bank lenders have reached a principle agreement to support a “comprehensive restructuring of the group’s financial indebtedness”.
The catering company said the proposed transaction will reportedly provide the group with “significant new liquidity” to address the company’s “short and medium-term needs” and will help establish a “stable capital” structure amid the impact of Covid-19.
The key features of the proposed transaction include CHF 500m (£416m) in new funding which will be provided by shareholders in the form of CHF 25m (£20.8m) in equity and a CHF 475m(£395m) “subordinated convertible” loan.
A further CHF 200m (£166.4m) will be provided as a senior secured interim liquidity facility which will be reportedly extended by shareholders and “repayable upon completion of the transaction” or six months after “issuance”.
The firm said the transaction is subject to the “execution of definitive documentation”, as well as customary conditions and regulatory and other approvals.
The respective parties are reportedly finalising a “lock-up agreement” with detailed terms of the transaction together with information on the “process for maturity extension” of the bonds due to be released soon.
Xavier Rossinyol, CEO of Gategroup, said: “This transaction is a key milestone for the Group. It will position Gategroup well for a recovery in the aviation sector and also support the Group’s diversification.
“The agreement signifies the commitment of our shareholders and lenders to the Group, its management and employees. The Group will work together with its stakeholders to further improve our cost structure and prepare for the ramping-up of business by our customers.”