Ellos Group Nordic AB (the 'Company') has been informed that its parent company, Ellos Group AB (the 'Parent'), filed for bankruptcy yesterday. This bankruptcy only involves the Parent and will not affect the operations of the remaining Ellos Group. An ad-hoc group of bondholders ('AHG') has now proposed a forbearance arrangement, confirmed their continued support for the business, and expressed willingness to support a transaction whereby the bondholders take over the Group. They have also agreed to underwrite a credit facility of up to SEK 250,000,000 to ensure the Group's ability to continue trading and meet its obligations throughout the process.
Photo: Ellos Group.
The Parent failed to meet its payment obligations under its SEK 1,500,000,000 senior secured bond loan on the scheduled maturity date, July 25th, 2024. Consequently, the bondholders under the Parent's SEK 250,000,000 super senior bond loan accelerated their claims due to cross default. These two bond loans are collectively referred to as the 'Bond Loans', and the bondholders under them as the 'Bondholders'. The Company and most of its subsidiaries are guarantors and have granted security in respect of the Bond Loans. The Parent has no substantial assets other than shares in the Company and certain other assets over which its creditors have security.
After the Bond Loans became due, an ad-hoc group of bondholders, representing more than 50% of the claims under the Bond Loans (the "AHG"), entered into a forbearance agreement with the Parent. This agreement aimed to either:
(i) allow the Parent additional time to propose an alternative solution for the repayment of the Bond Loans, or
(ii) facilitate the settlement of the Bond Loans through the Bondholders' acquisition of the Parent's substantial assets, including the remaining Ellos Group.
The Parent failed to sell its assets or propose a transaction to repay the Bondholders, and has instead filed for bankruptcy. As a non-operational holding company, the Parent is not involved in the daily operations of the Company or its subsidiaries (the 'Group'), meaning the bankruptcy is not expected to impact the Group's business operations. The Group intends to continue trading as normal and meet all its obligations.
The Company is in close dialogue with the AHG, which represents the Bondholders, the Group's only significant financial creditor. The AHG has proposed a forbearance arrangement and confirmed its continued support for the business. They have also expressed willingness to take over the Group and proposed to underwrite a credit facility of up to SEK 250,000,000 under certain conditions. This credit facility aims to ensure the Group can continue trading and meeting its obligations throughout the process.
Hans Ohlsson, CEO of Ellos Group, comments: 'I look forward to the support of our bondholders and am confident that the ongoing processes will contribute to a more sustainable capital structure. What is happening now is an important step in Ellos Group's efforts to strengthen the balance sheet, improve liquidity, and create the conditions to remain a long-term competitive and profitable company.'
More information:
Ellos Group
www.ellosgroup.com