Hamon : Major progress in the Group’s refinancing

Press release

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5th July 2019 - 06:00 PM

Major progress in the Group's refinancing: project to extend the syndicated loan and bond loan by 5 years with request to reduce the value of the redemption for the latter

Hamon Group is actively pursuing its transformation plan launched in 2017. Spread over 3 years, this plan aims to reshape the Group and ensure profitability with the following major actions:

• Focus on Hamon's core business: sales of peripheral and/or unprofitable activities:
• Focus on smaller projects and in particular customer service in order to optimize margins and reduce risks and financing needs;
• Optimization of synergies between product lines and integration of low-cost countries (India) into the supply chain and engineering;
• Improvement of project execution through centralized procurement and better control.

The implementation of the actions listed above has already resulted in a nearly 40% reduction in costs related to the Group's structure compared to the situation in 2016, as well as a return to a positive

REBITDA.

Additionally, the Group is pursuing its rationalization efforts by developing additional synergies within and between countries.

In order to be able to continue the implementation of this plan, Hamon must begin a final step: the refinancing of the syndicated loan (revolving credit lines, letters of credit and factoring) and the bond loan, both maturing in January 2020.

Hamon has thus obtained the conditional agreement of its reference banks and Sogepa for the refinancing project of the Group and the strengthening of its equity. This agreement is conditional on the bondholders' consent to (i) extend the maturity of the EUR 55 million bond loan maturing in January 2020, until January 2025 and to (ii) reduce the amount of the bond redemption and the annual coupon by 40%. This effort is requested from bondholders so that they can participate in the efforts made by the other partners.

The Board of Directors of Hamon Group will give its final approval for the refinancing when the procedures relating to Article 524 of the Companies Code (assessment of a potential conflict of interest between shareholders and the company) have been completed.

The refinancing includes the following:

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Hamon & Cie

www.hamon.com

Rue Emile Francqui 2, B-1435Mont-St-Guibert, Belgique

• Conversion of part of the letter of credit line into a revolving credit line for EUR 14 million up to EUR 56 million;
• A 50% conversion of the latter into a subordinated loan for an amount of EUR 28 million divided between EUR 14 million for the Group's banks and EUR 14 million for Sogepa, Hamon's reference shareholder; the lenders will no longer have access to the guarantees previously granted; the interest rate is set at 5.5%, of which 3.5% will be paid at maturity;
• Extension of the maturity of the bond loan until January 2025, with a 40% reduction in the redemption amount and the annual coupon;
• Extension of the maturity of the syndicated loan for the revolving credit line, such as that of the letters of credit, until January 2025.

At the end of the refinancing, the Group will significantly increase the maturity of its debt and will benefit from a subordinated loan of EUR 28 million, a revolving credit line of EUR 28 million, a line of letters of credit of EUR 181 million and a bond loan of EUR 33 million.

The financial structure of Hamon Group will be considerably improved and will make it possible to achieve net debt to equity ratios close to market standards. This restructuring will enable the Group to continue to implement its transformation plan.

The procedure for obtaining the bondholders' consent requires the convening of a general assembly of bondholders to be held shortly. A specific press release specifying the items to be submitted to the general meeting of bondholders will be published at a later date. If the attendance quorum is not reached at the first meeting, a second meeting will be convened (1) .

This agreement is vital to the Group's sustainability. If the plan is not approved by bondholders, the banks' agreement to extend the financing will lapse, resulting in risks to the company's continuity.

In parallel with the refinancing, Sogepa has announced its intention to purchase bonds for a maximum cumulative worth of EUR 10 million, at a price not exceeding EUR 50.000 per security, including accrued interest, provided that the number of securities contributed is at least 185. If the number of bonds offered to Sogepa in the context of this operation is less than 185, Sogepa will not purchase them. This approach is part of a desire to support and assist Hamon Group's refinancing plan and will allow bondholders who do not wish to keep their securities to sell all or part of them.

The terms of this potential purchase have been detailed in the attached press release.

The syndicated loan will be restructured once the bondholders have given their approval.

1. For the assembly to be able to deliberate validly, it is necessary that 75% of the bonds be represented at the meeting. If this attendance quorum is not reached, a second assembly will be convened. This assembly may deliberate if 25% of the bonds are represented. Decisions are adopted if they are approved by a majority of 75% of the bonds that took part in the vote.

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Hamon & Cie

www.hamon.com

Rue Emile Francqui 2, B-1435Mont-St-Guibert, Belgique

For any additional information:
Hamon Investors Relations	[e-mail]
Bernard Goblet, CEO	[e-mail]	+32.10.39.04.05
Christian Leclercq, CFO	[e-mail]	+32.10.39.04.22

Financial Calendar:
Press release Half-Year results S1 2019	5 September 2019

Hamon profile:

Hamon Group (www.hamon.com) is a world player in engineering & contracting (design, installation and project management). Its activities include the design, the manufacturing of critical components, the installation and the after-sale services of cooling systems, air pollution control (APC) systems, heat recovery steam generators (HRSG) and chimneys, used in power generation, oil & gas and other heavy industries like metallurgy, glass, chemicals. Hamon is listed on Euronext Brussels (symbol: HAMO).

Forward looking statements

This presentation contains forward-looking information that involves risks and uncertainties, including statements about Hamon's plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Hamon. Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, neither Hamon nor any other person assumes any responsibility for the accuracy of these forward-looking statements.

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Hamon & Cie

www.hamon.com

Rue Emile Francqui 2, B-1435Mont-St-Guibert, Belgique