Update on business plan, funding, capital structure and legal claim

18.11.2021 07:01:00 CET | Ice Group ASA | Inside information

Oslo, 18 November 2021 – Ice Group ASA (OSE: ICEGR) (“ICE Group” or the "Company")

ICE Group has for a period of time been reviewing its business plan options and its financing in conjunction with a broader review of its debt and equity capital structure.  Following this review, the Company now presents a new business plan involving accelerated subscriber growth with two distinct market concepts and an accelerated 5G roll out plan. The new business plan includes new medium-to-long-term targets on revenues of NOK 4-5 billion, adjusted EBITDA margin of above 30% and smartphone market share in Norway of above 20%. The implementation of the business plan is contingent on successful funding as described below.

Furthermore, ICE Group has reached an agreement with GoldenTree Asset Management LP (“GoldenTree”) regarding the previously announced dispute between GoldenTree and ICE Group's subsidiary AINMT Holdings AB (“AINMT”) relating to the loan agreement between GoldenTree, certain other lenders and AINMT (the “GT Loan Agreement”). AINMT has entered into a contingent settlement agreement with GoldenTree and the other lenders under the GT Loan Agreement, whereby the parties agree that upon payment by AINMT of approximately NOK 1,500 million, (exact amount depending on settlement date and prevailing exchange rate), the GT loan will be settled in full and the parties will release each other from any and all claims and counterclaims relating to the dispute and the GT Loan Agreement, provided that the lenders under the GT Loan Agreement receive payment within the agreed due date 31 December 2021, which is contingent upon the Company raising the sufficient funds for the payment.

As a result of the new business plan and the GT loan settlement agreement, ICE Group is considering various alternatives to fund the new business plan and the GT loan settlement amount, with an aim to reduce the complexity in the capital structure and lower its cost of capital. One alternative that is currently being explored is to seek additional funding through a potential equity raise with gross proceeds in the amount of up to NOK 2,500 million, of which approximately NOK 1,500 million will be used to settle the GT loan and the remaining up to NOK 1,000 million will be used for identified investment opportunities under the new business plan, including investments in 5G roll-out, network capacity, deferred payments and other CAPEX to facilitate growth going forward.

In parallel, ICE Group is in discussions regarding potential conversion into equity of its debt to Rasmussengruppen AS (“RG”) in the principal amount currently outstanding of SEK 546 million and the convertible bonds in the principal amount currently outstanding of NOK 760 million. The Company’s three majority shareholders support the ongoing process and are in discussions with the intent to support the Company by converting debt to equity as described above. The Company’s largest shareholder has indicated that it does not foresee to participate in the potential equity raise described above and has expressed interest in participating in the recapitalization by converting its share of the convertible bonds.

Note that each and all of the GT settlement, the potential conversion of debt to equity and the potential equity raise are dependent on each other. Accordingly, if the Company does not succeed with the equity raise as described above the other measures will lapse.

If successful, the above-mentioned potential transactions could fundamentally improve the Company`s capital structure, reduce net interest bearing debt with approx. 50% and reduce the Company’s overall interest costs by almost NOK 300 million per year.

The remaining funding requirement under the new business plan over the medium to long term is expected to be funded by increased secured and unsecured debt of approx. NOK 1 billion in Ice Group Scandinavia Holdings AS, with a medium to long term leverage target of 3-4x NIBD/EBITDA, in line with peers.  

The Company has prepared an updated Company presentation which is available on its website: https://icegroup.com/investor/reports-and-presentations.

The Company has retained DNB Markets, a part of DNB Bank ASA and Pareto Securities AS (the “Managers”) as financial advisors. The Managers have already initiated discussions with potential strategic and financial investors. The timing, structure and size of any capital transaction are not clear at this time and the Company will, together with its advisors, continue its work on assessing potential alternatives to refinance the ICE Group in a holistic perspective. It is emphasized that, other than the agreement with GoldenTree, no agreement has been entered into regarding the contemplated equity raise and refinancing and that the contemplated new business plan is contingent on ICE Group having completed such refinancing as set out in this announcement. At this stage, no assurance can be given that ICE Group will be able to secure the required refinancing or successfully implement other options to satisfy its financing requirements.

Alternative performance measures used in this announcement are defined and explained in the Company's Q3 2021 report.

Advokatfirmaet BAHR AS has been engaged as legal advisor to the Company, and Advokatfirmaet Thommessen AS has been engaged as legal advisor to the Managers.

 

CONTACTS

 * Espen Risholm, Head of investor relations, [phone], [e-mail]

 * Ola Beinnes Fosse, CFO, [phone], [e-mail]

 

DISCLOSURE REGULATION

This information is considered to include inside information pursuant to the EU Market Abuse Regulation article 7 and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act and the EU Market Abuse Regulation article 19. This stock exchange announcement was published by Espen Risholm, Head of investor relations in ICE Group ASA, on 18 November 2021 at 07:00 CET.

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, the Company do not have any intention or obligation to publicly update or revise any forward-looking statements after it distributes this announcement, whether to reflect any future events or circumstances or otherwise.

Neither of the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.

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