Inside Information

Rapala VMC Corporation Considers Issuance of a Hybrid Bond in Connection With Refinancing

 

Rapala VMC Corporation, Inside Information, November 16, 2023 at 9.45 a.m. EET

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Rapala VMC Corporation (“Rapala VMC”) considers the issuance of euro-denominated hybrid capital securities in the aggregate amount of up to EUR 25 million (the “Capital Securities”). The issuance of the Capital Securities may take place in the near future subject to market conditions. Rapala VMC would use the proceeds from the contemplated issue of the Capital Securities for general corporate purposes, including supporting its balance sheet and cash balance as well as improving its financial flexibility amid challenging trading environment while implementing savings program in operating expenses and optimizing its inventories. The contemplated issuance of the Capital Securities would also diversify Rapala VMC’s financing sources to capital markets.

The Capital Securities are subordinated to the company's other debt obligations and treated as equity in Rapala VMC’s consolidated financial statements prepared in accordance with the IFRS. The Capital Securities do not confer to its holders the rights of a shareholder and do not dilute the holdings of the current shareholders.

Rapala VMC’s largest shareholder, Viellard Migeon Et Compagnie Sa, has committed to participate in the potential issue by subscribing for the Capital Securities in an amount of EUR 10 million.

In connection with the contemplated issuance of the Capital Securities, Rapala VMC has agreed on key terms of and executed a mandate letter and a term sheet regarding EUR 106,000,000 senior secured term and revolving facilities (the “Facilities”) with OP Corporate Bank plc, Skandinaviska Enskilda Banken AB (publ) and Nordea Bank Abp as underwriters of the Facilities (the “Lenders”) for the purposes of refinancing Rapala VMC’s existing loan facilities with the Lenders and for general corporate purposes (the “Refinancing”). The term of the Facilities is fifteen (15) months from the signing of the facilities agreement relating to the Refinancing, subject to two extension options of twelve (12) months each.