Joint representative of the holders of the Ekosem-Agrar bond 2019/24 (ISIN: DE000A2YNR08): Call to boycott noteholders’ meetings is grossly negligent
- Many noteholders support countermotion by noteholders' advisory committee to move forward
- Overall package of countermotion challenges but does not overwhelm all stakeholders
- Unequivocal interest of noteholders to ensure minimum presence required by law
Stuttgart, May 25, 2022
As joint representative of the noteholders of the Ekosem-Agrar bond 2019/24 (ISIN: DE000A2YNR08) and as designated joint representative of the Ekosem-Agrar bond 2012/2022 (ISIN: DE000A1R0RZ5), e.Anleihe GmbH disapproves the recent call by an investor representative to boycott the upcoming noteholders' meetings.
"This call is grossly negligent," said the managing director of e.Anleihe GmbH, Christoph Chardon.
Dr. Benjamin Büttner of e.Anleihe GmbH added: "Preventing a quorum and at the same time wanting to avoid an insolvency of the issuer are not compatible with each other. The noteholders we have spoken to have weighed up the risks very thoroughly. They support the countermotion to keep things moving forward."
Noteholders should, in their own best interest, ensure the minimum presence required by law by attending or granting proxies at the noteholders' meetings in Sinsheim on May 30 and 31, 2022.
Overall package of countermotion challenges but does not overwhelm all parties involved
e.Anleihe GmbH had welcomed the countermotion of the noteholders' advisory committee because the issuer is making a good deal of concessions to the noteholders. "In the exchange with the noteholders' advisory committee and the issuer, it was possible to put together a bundle of measures into an overall package that challenges but does not overwhelm all parties involved," said Büttner.
With the write-up at the end of the term, the noteholders are precisely not supposed to definitively relinquish significant assets. Rather, it is essentially a matter of all stakeholders accepting a temporary moratorium during this politically sensitive situation.
Put option in the event of a change of control
e.Anleihe GmbH is surprised that an established and highly specialized consulting firm for complex financial restructurings, of all things, thoroughly misunderstands the basically simple facts of the change of control.
"The basic system remains unchanged by the current countermotion," Chardon points out. "The concept is currently already governed by the terms of the bonds."
Following the display of a change of control notice by the issuer, noteholders have the option of exercising their put option vis-à-vis the company. This becomes effective if the number of exercising noteholders reaches the capital majority of 51 percent proposed in the countermotion. Ultimately, only the quorums are to be adjusted upwards from 50 percent to 51 percent in the 2012/2022 bond and from 25 percent to 51 percent in the 2019/2024 bond. Thus, there is also no need to organize any votes.
"Incidentally, the opposite path proposed by One Square makes no sense at all in terms of insolvency law," Büttner elaborates.
Reduced interest rate of 2.5 percent with incentive system for issuer
The reduced interest rate takes into account the consideration that the Russian Federation is subsidizing the company as a systemically relevant basic food supplier even more massively than before during the current political turmoil. Transferring a significant proportion of these subsidies to unsecured bondholders in "unfriendly foreign countries" is probably not negotiable with the Russian Federation at present for understandable reasons.
Ultimately, however, the system envisaged in the countermotion is in principle quite close to a pure deferral solution in economic terms because of the value recovery component, since the difference between the previous coupon and the new coupon at the end of the term will increase the repayment amounts.
However, the incentive system for noteholders is intended to ensure that the bonds are refinanced as quickly as possible. "We had gained the impression from our numerous discussions with noteholders that this is currently a core concern of many stakeholders," comments Büttner.
Maturity extension of five years
The countermotion of the noteholders' advisory committee aims to ensure that the graduated incentive and value recovery mechanism can be put into practice. With a term of less than five years, this mechanism would probably be a mere paper tiger. All parties assume that refinancing of the bonds in the next two years is likely to be out of the question, given the Ukraine crisis.
"From our point of view, this is not a completely unreasonable compromise," Chardon comments. "The company has enough incentive, in our view, via the value recovery component, to bring about the quickest possible redemption as soon as the capital markets allow it again."
Noteholders' vested interest in ensuring minimum presence required by law
The managing director of e.Anleihe GmbH, Christoph Chardon, reiterates his advice to all noteholders to attend the noteholders' meetings on May 30 and May 31, 2022, in person or by proxy, in their own well-understood interest, in order to ensure the minimum presence required by law.
"Any other advice is grossly negligent," Büttner reinforces on behalf of e.Anleihe GmbH.
Blocking notices to be attached without delay
Before the two upcoming meetings, noteholders should immediately apply via the custodian banks for current special evidence from the custodian institution of ownership of the bonds and the blocking notices required for the meetings. The submission of the blocking notices by the respective noteholder or its representative is required for the exercise of voting rights on the day of the meeting.
e.Anleihe GmbH points out that the Issuer has agreed to bear the costs incurred by the noteholders for the deposit certificate with blocking notice for the second noteholders' meeting. After participating (by proxy or in person), the noteholders can send Ekosem-Agrar AG via the e-mail address ir@ekosem-agrar.de with proof of the costs incurred and their bank details.
Possibility to authorize free of charge
Noteholders who are unable to attend the further noteholders' meetings in Sinsheim on May 30 and 31, 2022, have the option of appointing a proxy free of charge. In this way, they ensure that the proposed reversal of impairment or the incentive of the repayment scale can be resolved and implemented in a binding manner for the Company.
In particular, the following persons can be authorized free of charge:
Contact person for the noteholders:
e.Anleihe GmbH
+49 (0) 711 184 2923 - 1
ekosem@elsaesser.co
Contact for media representatives:
thomas SCHULZ
tsc.komm I Cologne-Ehrenfeld
mobile: + 49 171 86 482
mail: tsc@tsc-komm.de
25.05.2022 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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