ORPEA Completes a New Step of Its Financial Restructuring Process With the Opening of an Accelerated Safeguard Procedure

Rhea-AI Summary

ORPEA S.A. has initiated an accelerated safeguard procedure in the Commercial Court of Nanterre, allowing a restructuring plan over an initial observation period of two months. This may be extended by two additional months, not exceeding four months total. This step aims to execute a financial restructuring plan following a lock-up agreement with significant creditors, involving approximately EUR 1.9 billion in unsecured debt and an additional financing of EUR 600 million. However, the anticipated capital increases will lead to substantial shareholder dilution, with prices significantly lower than current market values.

Positive

• Initiation of an accelerated safeguard procedure allows for a structured restructuring plan.
• Engaged with a group of major investors and creditors to restructure approximately EUR 1.9 billion in unsecured debt.

Negative

• The planned capital increases will result in massive dilution for existing shareholders.
• New equity issue prices are expected to be significantly lower than the current stock market price, adversely affecting shareholder value.

PUTEAUX, France--(BUSINESS WIRE)-- Regulatory News:

ORPEA S.A. (Paris:ORP) (the “Company”) announces the opening today of an accelerated safeguard procedure by the specialised Commercial Court of Nanterre, accompanied by an initial observation period set at 2 months, which may be renewed for two additional months without exceeding a total duration of 4 months maximum.

The purpose of initiating this procedure is notably to enable the Company to implement its restructuring plan in accordance with the agreements reached under (i) the lock-up agreement on the financial restructuring of the Company concluded on 14 February 2023 with, the group of French long-term investors comprising Caisse des Dépôts, CNP Assurances, MAIF and MACSF, and on the other hand, five institutions holding the unsecured debt of Company (the “SteerCo”), to which approximately 51% of the Company’s unsecured creditors (including the members of the SteerCo) (representing an outstanding unsecured debt of approximately EUR 1.9 billion) adhered as at the longstop date of 10 March 2023 and (ii) the agreement (accord d’étape dans la perspective de l’ouverture d’une sauvegarde accélérée) concluded on 17 March 2023 between the Company and its main banking partners, providing for the terms and conditions of an additional financing of 600 million euros and an adjustment of the financing documentation of June 2022.

In this context, the Court appointed SELARL FHB, in the person of Hélène Bourbouloux, as judicial administrator and SELARL AJRS, in the Person of Thibaut Martinat, as co-judicial administrator.

As indicated several times by the Company in its previous communications, the implementation of the capital increases envisaged in the context of the financial restructuring plan, which are expected to be completed in the second half of 2023, will result in a massive dilution for the existing shareholders. On the basis of the financial parameters previously communicated by the Company and the valuation of the Company's equity used by the parties for the purposes of these operations, these capital increases would take place at issue prices significantly lower than the current stock market price of the ORPEA share.

The main features of the financial restructuring plan proposed by the Company as part of the accelerated safeguard procedure opened today are described in the Annex to this press release.

About ORPEA

ORPEA is a leading global player, expert in the care of all types of frailty. The Group operates in 22 countries and covers three core businesses: care for the elderly (nursing homes, assisted living, home care), post-acute and rehabilitation care and mental health care (specialized clinics). It has more than 72,000 employees and welcomes more than 255,000 patients and residents each year.

https://www.orpea-group.com/en/

ORPEA is listed on Euronext Paris (ISIN: FR0000184798) and is a member of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and CAC Mid 60 indices.

Warning - Forward-looking information

This press release contains forward-looking information that involve risks and uncertainties, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors out of the control of the Company and not precisely estimated, such as future market conditions. Any forward-looking statements made in this press release are statements about the Company’s expectations about a future situation and should be evaluated as such. Further events or actual results may differ from those described in this press release due to a number of risks and uncertainties that are described in the 2021 Company’s Universal Registration Document available on the Company’s website and on the Autorité des Marchés Financiers website (www.amf-france.org), and in the Half-Year 2022 financial report which is available on the Company’s website.

This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction

ANNEX

View source version on businesswire.com: https://www.businesswire.com/news/home/20230324005374/en/

Investor Relations

ORPEA

Benoit Lesieur

Investor Relations Director

b.lesieur@orpea.net

Toll free tel. nb. for shareholders:

+33 (0) 805 480 480

Investor Relations

NewCap

Dusan Oresansky

+33 (0)1 44 71 94 94

ORPEA@newcap.eu

Media Relations

ORPEA

Isabelle Herrier-Naufle

Media Relations Director

+33 (0)7 70 29 53 74

i.herrier-naufle@orpea.net

Image 7

Charlotte Le Barbier

+33 (0)6 78 37 27 60

clebarbier@image7.fr

Laurence Heilbronn

+33 (0)6 89 87 61 37

lheilbronn@image7.fr

Source: ORPEA S.A.

FAQ

What is the recent announcement by ORPEA regarding its stock symbol ORRRY?

ORPEA announced it has opened an accelerated safeguard procedure to enable its financial restructuring.

How will the safeguard procedure affect ORPEA's shareholders?

The safeguard procedure will result in capital increases that will significantly dilute existing shareholders' equity.

What is the total amount of unsecured debt ORPEA is restructuring?

ORPEA is restructuring approximately EUR 1.9 billion in unsecured debt as part of its financial restructuring plan.

What additional financing has ORPEA secured in connection with its restructuring plan?

ORPEA has secured an additional financing of EUR 600 million from its main banking partners.

What is the expected impact of the capital increases on ORPEA's stock price?

The capital increases are expected to occur at issue prices significantly lower than ORPEA's current stock market price.