OHL’s financial restructuring will be submitted to shareholder scrutiny next March 26 in extraordinary meeting. The call includes point by point each of the steps that the company has been taking since the end of January to convert nominated debt into bonds into equity and raise new funds through extensions. It is about cutting the outstanding balance of the bonds by 105 million (from 593 million), lengthening the repayment term, and receiving between 42 and 71 million in fresh money from shareholders. The balance sheet will be reinforced by a sum of 147 to 176 million euros.
Among the items on the agenda is the payment of an incentive in shares to the brothers Luis and Mauricio Amodio, first shareholders of the construction company, for their commitment to the recapitalization of the company. The prize is 4.8 million shares, with a total nominal value of 1.7 million euros.
Before doing so, the first item on the agenda includes a reduction in share capital, lowering the nominal value of the shares by 0.35 euros each. to endow a voluntary reserve not available. The shares will go from 0.6 euros to 0.25 euros.
From that movement come the extensions. The first is 35 million euros with the issue of 97.2 million shares at 0.25 euros par value. This contemplates the pre-emptive subscription right and it will house part of the investment commitments of the Mexican family Amodio (37 million euros) and the Tyrus fund (5 million euros).
The latter is a creditor of Villar Mir Group, second shareholder of OHL with 14% of the capital. Some shares that Tyrus has as guarantee for the collection of a loan of 200 million. Sources close to the company explain that the Monegasque fund enters OHL to take care of the value of its garment.
This is followed by a second increase in the share capital in OHL for a maximum of 36.4 million euros, with the issuance and putting into circulation of a maximum of 101.1 million ordinary shares, also with a nominal value of 0.25 euros. In this case, the pre-emptive subscription right is excluded and incomplete subscription is foreseen. This is a supplement to the first raise to cover the Amodio and Tyrus call for shares if necessary.
The meeting’s agenda provides for a third capital increase for 68 million with the issuance of 91.9 million securities (0.25 euros per unit) to capitalize part of the bonds. OHL plans to combine its two debt remittances into one, with a reduction and a longer repayment term. Currently, the construction company has a bond of 323 million and maturity in 2022 and a second bond of 270 million of outstanding balance and amortization in 2023. Following the agreement with the bondholders, which was endorsed by almost all of them days ago, it goes to 488 million debt with 50% maturing in 2025 and the other half maturing in 2026.
The fourth planned increase is 1.75 million (4.8 million shares) and will be used to capitalize the credit rights derived from the commission agreed with Forjar Capital and Solid Rock Capital. Both are instrumental to the Amodio brothers and will receive the titles “for their participation in the restructuring process and the assumption of an investment commitment in the Company”, it is specified in the call for the meeting.
There is still a fifth capital increase in sight, for 3.4 million euros (9.45 million shares) to capitalize the credit rights derived from the commission payable to the bondholders who assumed the exchange of debt for shares.
With the new funds in hand and the relief of the bond refinancing, OHL will create up to three newcos to house the companies that will be placed as collateral for their new debt securities (OHL Industrial, Desarrollos, Servicios, Senda Infraestructuras or Construcción Internacional). Two of them will be domiciled in Luxembourg, at the request of investors, to facilitate the enforcement of guarantees if necessary.
OHL and Grupo Villar Mir (GVM) have completed the operations planned at the end of last year to pay off part of the debt of 129 million euros that the second largest shareholder of the construction company had with the company.
Both set February 20 as the deadline for the closing of the operation by which the founder of OHL would deliver Pacadar and Alse Park to OHL, a transaction that has already been completed, as reported by the construction company to the CNMV.
The terms of the agreement contemplate the dation in payment of 100% of the shares of Pacadar, owned by GVM, in favor of OHL to partially settle the debt, as well as the dation in payment of the shares of the company Alse Park, representing 32 , 5% of its capital, also owned by GVM.
Likewise, the agreement includes the recognition by GVM of a debt of 45.85 million euros with OHL after the payment of the shares in these two companies.
This debt is distributed in a first tranche of 22 million euros with a maturity of five years and guaranteed by a pledge on shares of Espacio Information Technology, as well as another tranche for an amount of 11 million euros, with a maturity of two years and guaranteed by a pledge on certain credit rights of GVM.
In a third tranche, for an amount of 12.85 million euros with a maturity of five years, a contingent repayment has been established on the stock market valuation of GVM’s stake in Ferroglobe or its sale at a certain price.