Capital/Financing Update • Aug 14, 2017
Capital/Financing Update
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Axactor and Geveran enter into co-investment partnership securing EUR 300 million in investment capacity
Oslo, 14 August 2017 - Axactor AB (publ) ("Axactor") and Geveran
Trading Co. Limited, a company indirectly controlled by trusts
established by Mr. John Fredriksen for the benefit of his immediate
family ("Geveran"), have signed a letter of intent regarding the
establishment of a jointly owned portfolio investment company (the
"Portfolio Investment Company"). Axactor and Geveran will both invest
EUR 30 million of equity and hold a 50 per cent ownership each. In
addition, Geveran will provide a subordinated debt facility of up to
EUR 120 million. The Portfolio Investment Company will in addition
seek bank financing. The targeted investment capacity of the
Portfolio Investment Company will be around EUR 300 million.
The Portfolio Investment Company will focus on larger portfolios
above EUR 30 million in Capex and have a first right of refusal on
such portfolios. The Portfolio Investment Company will invest in new
portfolios for a period of 24 months after which the Portfolio
Investment Company will continue to manage the portfolios acquired up
until then. Axactor will continue to acquire commercially attractive
portfolios below the EUR 30 million threshold on its own. The
Portfolio Investment Company may acquire portfolios below EURm 30
that Axactor does not acquire. Axactor will have an exclusive service
agreement with the Portfolio Investment Company under which Axactor
will manage and collect the claims owned by the Portfolio Investment
Company. Axactor will charge the Portfolio Investment Company a 5 per
cent mark-up on debt collection services.
The Portfolio Investment Company will be capitalised with EUR 60
million of equity, a subordinated debt facility with Geveran (or one
of its affiliates) of EUR 120 million and bank financing of around
EUR 120 million. The subordinated debt facility will have a 5 year
tenor with an interest margin of 650 bps over EURIBOR. Consequently,
the Portfolio Investment Company will have a target leverage of up to
80 per cent loan-to-value securing a highly competitive capital
structure with attractive equity returns.
"We are very pleased to have Geveran as our co-investment partner.
They have long experience in the sector and significant capital
available. This partnership enables Axactor to substantially increase
our total investment capacity, and is an important strategic
milestone for the company. We can pursue larger acquisitions while
optimising the cost of capital and managing the risk of larger
purchases. The service agreement between Axactor and the Portfolio
Investment Company will secure immediate and attractive cash flow
generation to Axactor, while the capital structure of the Portfolio
Investment Company will secure attractive equity returns to the
Axactor shareholders", says Endre Rangnes, CEO of Axactor.
Axactor and Geveran will each have 50 per cent of the representatives
of the Board of Directors of the Portfolio Investment Company.
Axactor will prepare and present the business case for portfolio
purchases within scope to the Board of Directors of the Portfolio
Investment Company. Each party shall have veto right regarding
portfolio purchases.
The establishment of the Portfolio Investment Company is subject to
the parties entering into final agreements. The target is for the
Portfolio Investment Company to be operational from early Q4 2017.
Related to the establishment of the Portfolio Investment Company,
Axactor has resolved to grant 130,000,000 American style warrants in
Axactor to Geveran with an exercise price of NOK 3.25. The warrants
will only be exercisable if the Portfolio Investment Company is
established, and will expire 2 years thereafter. The warrants are
subject to customary recalculation provisions following certain
capital events.
Endre Rangnes, CEO of Axactor, Oddgeir Hansen, Chief Operating
Officer of Axactor and Johnny Tsolis, Executive Vice President,
Strategy & Projects of Axactor, have agreed to enter into a 2 year
lock-up undertaking in relation to the shares currently owned by
them.
DNB Markets, a part of DNB Bank ASA, acted as financial adviser for
Axactor relating to the Portfolio Investment Company.
For additional information, please contact:
Endre Rangnes, CEO Axactor
Mobile phone: +47 4822 1111
Email: [email protected]
or
Geir Johansen, CFO & Investor Relations, Axactor
Mobile phone: +47 4771 0451
Email: [email protected]
www.axactor.com
About Axactor
Axactor Group specializes in both Debt Collection and Debt Purchasing
across several countries, with operations in Italy, Germany, Norway,
Sweden and Spain. The company has a Nordic base and an ambitious Pan-
European growth strategy, which targets the market for non-performing
loans (NPL) in Europe. This market is estimated to be about 1,500
billion euros across Europe providing significant opportunities for
Axactor's future expansion. Axactor has approximately 888 employees.
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