UPDATE ON NEGOTIATIONS WITH DEBENTURE HOLDERS
Amsterdam, October 23, 2018 - Kardan N.V. (‘Kardan’ or ‘the Company’), active in Real Estate and Infrastructure in emerging markets hereby announces an update on the negotiations of a debt settlement with the trustee and representatives of debenture holders series B.
The negotiations entail changes to the terms of the debentures series A and series B according to the principles outlined below. It should be noted that the negotiations with the trustee to debenture holders series B (‘the Debentures’ or ‘Debentures B’) have not yet been completed, and the negotiations with the trustee to debenture holders series A (‘Debentures A’) have not yet commenced. In addition, the Board of Directors of the Company has not approved the principles as stated below. Therefore, this press release does not entail that the Company or its governing bodies have taken a resolution to amend the deeds of trust. To ensure equal information dissemination, the principles are however disclosed as Debentures B will be discussing them in a meeting that will be held today.
The principles1
1. The principal amount of the Debentures and the interest rate will remain unchanged.
2. The final repayment date of the Debentures will be postponed to December 2021. In parallel the Company will commit to sell assets – and in relation to one asset, according to an agreed upon timetable – and to use the funds received from such disposals for early repayment of Debentures A and B, and other uses according to terms agreed with the representatives of the Debentures.
3. The interest that should have been paid on 1.2.2018 will be payable at Completion Date. In addition, the Company will pay each year interest at a rate of 4% p.a. The remaining interest will be payable at each date the Company repays (part of) the principal of the Debentures.
4. The Company shall issue to Debenture Holders A and B shares of the Company. The shares will be issued in 3 tranches each of 15% of the issued and paid-in capital of the Company at the date of issuing each tranche of shares. The shares will be issued to the Debentures A and B which will hold debentures at the date the amended deeds of trust will come into force (‘the Completion Date’).
5. The funds to be used for repayment will be used first to make the balance payments (as defined in the existing deeds of trust) to Debenture Holders B, and each subsequent amount will be repaid pro-rata to the two debenture series.
6. To secure the Company’s obligations, the existing securities and pledges will remain.
7. The Company, Kardan Financial Services, Kardan Land China, Tahal Group International and their subsidiaries will operate according to limitations to be agreed between the parties, which will include, mainly, the limitations as stipulated in the existing deeds of trust, and additional limitations to be agreed between the parties. In addition, the Company will commit to meet certain financial covenants in relation to its equity, debt coverage ratio, and operational performance of Galleria Dalian.
8. Each material transaction of the Company and its subsidiaries will be subject to approval of a joint meeting of the debenture holders A and B.
9. The Board of Directors of the Company will consist of no more than 9 directors, out of which the trustees will have the right to recommend the identity of 2-3 directors, who shall also serve in committees of the Board. 1 It should be emphasized that this press release includes a general and non-exhaustive description of the principles of the debt settlement agreed upon for the time being with the Debenture Holders. These principles are not final, have not yet been discussed at the meetings of the Debenture Holders and / or the authorized bodies of the Company, and approval of the meetings of the Debenture Holders and / or the authorized bodies of the Company has not yet been received for the changes specified in this press release.