Balta : Amendment and Extension of Revolving Credit Facility and preview of Q3 2020 trading. 02/02/2021Balta Group

Press Release

Sint-Baafs-Vijve, 2 February 2021, 08:45 p.m. CET

Inside information

For immediate publication

Announcement of Exchange Offer for Senior Secured Notes Preview of Q4 and FY 2020 trading

Q4 2020 consolidated Revenue of €151m (-8% YoY)

Q4 2020 Adjusted EBITDA of €28m, a significant +41% YoY increase

Full year consolidated Revenue of €562m (-16% YoY)

Full year Adjusted EBITDA of €68m (-9% YoY)

FYE 2020 Net Debt1 reduced by €31m to €283m from FYE 2019 Net Debt1 of €314m, driven by strong cash generation

Balta has today launched a notes Exchange Offer, Consent Solicitation and Scheme Solicitation. If successful, the maturity of Balta's major financial liabilities will be extended from Q3 2022 to end Q4 2024. c. 52% of the aggregate principal amount of noteholders have already supported the Offer.

Preliminary consolidated performance for Q4 and FY 2020 2

• Q4 2020 consolidated Revenue of €151m (-8% YoY), with FY 2020 of €562m (-16% YoY).
• Q4 2020 continued the steady recovery which began in Q3, despite COVID-19 trading restrictions.
• Q4 2020 Adjusted EBITDA strongly improved to €28m (+41% YoY), with FY 2020 Adjusted EBITDA expected to be around €68m (-9% YoY), thanks to continued efficiency and margin improvements resulting from our NEXT program, lower raw material prices and reduced fixed costs.
• Adjusted EBITDA margin in Q4 2020 increased to 18%, compared to 12% in Q4 2019. FY 2020 Adjusted EBITDA margin expected to be 12%, up 1% YoY, despite the significant fall in volumes due to COVID-19 lockdowns in the second quarter of 2020.
• Our liquidity position has remained comfortable throughout the year. FYE 2020 cash was €106m, with a further €7m available to draw under the US RCF. Total available liquidity, including undrawn RCFs, increased from €100m at FYE 2019 to €114m at FYE 2020.

More details on the full year 2020 results will be provided during the earnings release presentation on 10 March 2021.

1. Net Debt is defined as (i) Senior Secured Notes adjusted for the financing fees included in the carrying amount, (ii) Senior Term Loan Facility adjusted for capitalized financing fees, (iii) Bank and other borrowings adjusted for capitalized financing fees and (iv) cash and cash equivalents. Net Debt includes the impact of IFRS16.
2. Unaudited, subject to 2020 financial audit review.

Wakkensteenweg 2, 8710 St-Baafs-Vijve, Belgium

[phone] [e-mail] www.baltagroup.com

Exchange Offer, Consent Solicitation and Scheme Solicitation

Balta is pleased to announce that it has entered into an agreement with noteholders representing c. 52% of the aggregate principal amount of the 7.75% Senior Secured Notes due 2022 (the "Existing Notes") issued by LSF9 Balta Issuer S.à r.l (the "Issuer"), to tender their Existing Notes in an exchange offer (the "Exchange Offer") for new Senior Secured Notes with a maturity of December 31, 2024 (the "New Notes"), to vote in favour of certain amendments to the terms of the Existing Notes and the indenture governing the Existing Notes (the "Existing Indenture") by way of a consent solicitation ("Consent Solicitation") and to support commencement of a scheme of arrangement under Part 26 of the UK Companies Act 2006 or an analogous legal process in the United Kingdom (the "Scheme") (the "Scheme Solicitation").

The Exchange Offer, Consent Solicitation and Scheme Solicitation have been launched today. If successfully consummated, the transactions contemplated by the Exchange Offer, Consent Solicitation and Scheme Solicitation will materially extend the maturity profile of Balta's major financial liabilities from 2022 to 2024, allowing it to continue its steady recovery from the COVID-19 disruptions experienced in the first half of 2020 and focus on delivering value for its stakeholders.

The full details of the Exchange Offer, Consent Solicitation and Scheme Solicitation are provided in the exchange offer memorandum dated February 2, 2021 (the "Exchange Offer Memorandum") issued by the Issuer.

This announcement is a summary of the Exchange Offer Memorandum only. It highlights selected information contained in the Exchange Offer Memorandum and does not contain all of the information that you should consider before making a determination with respect to the Exchange Offer, Consent Solicitation or Scheme Solicitation. The Exchange Offer Memorandum sets forth full details of the transactions summarised in this announcement and Eligible Holders (as defined below) are urged to read the Exchange Offer Memorandum in its entirety. Capitalised terms used but not defined in this announcement have the meanings given to them in the Exchange Offer Memorandum.

The key terms of the Exchange Offer, Consent Solicitation and Scheme Solicitation are as follows:

• Eligibility to Participate - the Exchange Offer, Consent Solicitation and Scheme Solicitation are directed only to those holders of the Existing Notes (the "Noteholders") who are either (A)(i) "qualified institutional buyers" (as that term is defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act")) transacting in a private transaction in reliance upon an exemption from the registration requirements of the U.S. Securities Act, (ii) institutional "accredited investors" (within the meaning of Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13) under the U.S. Securities Act) or (iii) holders who are not "U.S. persons" (as that term is defined in Rule 902 under the U.S. Securities Act) that are outside the United States transacting in an offshore transaction in accordance with Regulation S under the U.S. Securities Act (and if they are resident in any member state of the European Economic Area ("EEA") or the United Kingdom, they are not "retail investors" in the EEA or the United Kingdom) (each such Noteholder, an "Eligible Holder").

Wakkensteenweg 2, 8710 St-Baafs-Vijve, Belgium

[phone] [e-mail] www.baltagroup.com

• The Exchange Offer:

1. Offer Size - the Issuer is making an offer to Eligible Holders to exchange all of their Existing Notes for either (i) €1,000 in principal amount of New Notes ("Notes Consideration"); or (ii) cash consideration at a price equal to €980 in cash ("Cash Consideration"), in each case, for each €1,000 in principal amount of the Existing Notes validly tendered and exchanged (and not validly withdrawn). Up to €234,900,000 in aggregate principal amount of the New Notes are offered as part of the Exchange Offer;

1. Maturity of the New Notes - the New Notes will mature on December 31, 2024;

1. Interest Rate of the New Notes - a cash interest of 7.75%, plus a payment-in-kind interest of:
   (a) 1.00% from the date of issuance of the New Notes until (but excluding) March 15, 2024; and (b) 3.00% from and including March 15, 2024 to (but excluding) December 31, 2024. The amount of interest due on the first interest payment date in respect of the New Notes will comprise (i) accrued and unpaid interest, if any, in respect of the Existing Notes, to (but excluding) the Settlement Date, and (ii) accrued and unpaid interest in respect of the New Notes from and including the Settlement Date. Participating Holders receiving Cash Consideration will be paid accrued and unpaid interest to (but excluding) the Settlement Date in respect of Existing Notes for which Cash Consideration is received, in cash on the Settlement Date;

1. Call premium - the New Notes will be subject to a soft call at 102% of the principal amount of New Notes to be redeemed for optional redemptions in the first six months following the Settlement Date, followed by a par call and then a call at 102% of the principal amount of New Notes to be redeemed for optional redemptions on or after March 15, 2023;

1. Guarantees and Security of the New Notes - the New Notes will be guaranteed on a senior basis by the existing guarantors of the Existing Notes, and will be secured by the same collateral securing the Existing Notes. The New Notes will also benefit from security over Belgian real estate valued at €46m, also provided as additional security to the European
   SSRCF;

1. Covenants of the New Notes - the New Notes will be subject to covenants substantially the same as for the Existing Notes, but will additionally include a restriction on creating unrestricted subsidiaries, a negative pledge on certain security and an undertaking to comply with a guarantor coverage test; and

1. Consideration - Participating Holders will elect to receive, on the Settlement Date, one of the following options: (i) (a) Notes Consideration, being €1,000 aggregate principal amount of New Notes for each €1,000 in principal amount of Existing Notes validly tendered and exchanged (and not validly withdrawn)("Settlement Consent Payment"), (b) a consent fee of €2.50 per €1,000 of Existing Notes validly tendered and exchanged (and not validly withdrawn) and (c) to the extent such Participating Holder validly submits an instruction prior to the Early Consent Deadline and does not validly withdraw instruction, an early consent fee of €5.00 per €1,000 of Existing Notes validly tendered and exchanged (and not validly withdrawn); or (ii) Cash Consideration, being €980 in cash for each €1,000 principal amount of Existing Notes validly tendered and exchanged (and not validly withdrawn); provided that in the event the

Wakkensteenweg 2, 8710 St-Baafs-Vijve, Belgium

[phone] [e-mail] www.baltagroup.com

total aggregate principal amount of Existing Notes tendered for Cash Consideration exceeds €40,000,000, (a) the amount of Cash Consideration actually received by any Participating Holder will be reduced in proportion to aggregate principal amount of Existing Notes who have elected option (ii) such that the Issuer would not pay total Cash Consideration in excess of €39,200,000 in aggregate, and (b) the portion of such Participating Holder's Existing Notes tendered but not accepted for Cash Consideration will be exchanged for the Notes Consideration (with €1,000 aggregate principal amount of New Notes for each €1,000 in principal amount of such Existing Notes validly tendered and exchanged (and not validly withdrawn)), along with Settlement Consent Payment and Early Consent Consideration.

• Amendments to the Existing Notes - the untendered Existing Notes are proposed to be amended in the following manner:
• 1. in case Noteholders representing a majority of Existing Notes consent, the Existing Notes will be amended to: (i) remove substantially all of the covenants and other obligations and certain events of default under the Existing Indenture that can be removed with the consent of holders of Existing Notes representing a majority of the aggregate principal amount outstanding of the Existing Notes, (ii) waive any defaults or events of default under the Existing Indenture arising in connection with the Scheme and any proceeding under Chapter 15 of the U.S. Bankruptcy Code in connection with the Scheme or any other jurisdictions as may be necessary to recognize the Scheme and (iii)(A) waive the requirements under Article 5 of the Existing Indenture to facilitate the substitution of the Issuer with an English entity, (B) permit the addition of an English entity as a co-issuer of the Existing Notes or (C) permit any other amendments, including an exclusive New York jurisdiction clause and a forbearance from blocking enforcement of the Scheme, which in the Issuer's reasonable opinion, are either necessary or desirable to facilitate the creation of a sufficient connection to the United Kingdom, in each case for the purposes of the Scheme; and
  2. in case Noteholders representing 90% or more of the Existing Notes consent, the Existing Notes will be amended to: (i) release all of the Existing Notes' guarantors from their obligations under their existing guarantees, (ii) release all of the liens in the collateral granted for the benefit of holders of the Existing Notes, (iii) reduce the interest rate applicable to the Existing Notes to 3.00% per annum and (iv) extend the maturity date of the Existing Notes to December 31, 2030.
• Scheme Solicitation - if the Issuer obtains, pursuant to the Scheme Solicitation, the support of Noteholders representing at least 75% (but less than 90%) in aggregate principal amount outstanding of the Existing Notes, the Issuer proposes to commence the Scheme, instead of pursuing the Exchange Offer or the Consent Solicitation. The terms of the Scheme will be substantially the same as the terms of the Exchange Offer that would be applicable if holders of Existing Notes representing 100% of the aggregate principal amount outstanding of the Existing Notes validly tendered their Existing Notes, subject to necessary consequential changes.
• Timing - the Exchange Offer, Consent Solicitation and Scheme Solicitation will have an Early Consent Deadline of 5:00 p.m. London time on February 17, 2021 and will expire at 5:00 p.m. London time on March 3, 2021, in each case, unless amended, extended or terminated by the Issuer in accordance with the Exchange Offer Memorandum. Eligible Holders may submit their instructions in respect of the Exchange Offer, Consent Solicitation and Scheme Solicitation at any time prior to the Expiration Time, but Participating Holders opting to receive Notes Consideration will receive the Early Consent Fee, and Participating Holders opting to receive Cash Consideration will be eligible to receive Cash

Wakkensteenweg 2, 8710 St-Baafs-Vijve, Belgium

[phone] [e-mail] www.baltagroup.com