Solocal’s €500 Million Restructuring

Davis Polk advised the board of directors of Solocal Group S.A. in connection with its financial restructuring. White & Case advised the bondholders on the financial restructuring of the Solocal Group.

The restructuring agreement, executed on July 3, 2020, which remains subject to the approval of the shareholders (scheduled to occur on July 24, 2020, during the Combined General Meeting), will enable Solocal to secure a €117 million liquidity injection.

This financial restructuring, unanimously approved by the board of directors, relies mainly on a €347 million capital increase, open to all existing shareholders and fully backstopped by bondholders, that will enable (i) a €252 to €262 million debt reduction (principally by way of debt conversion) and (ii) an €85 million cash injection. This cash injection will be completed by a €32 million additional financing fully underwritten by bondholders, in case Solocal is not able to execute a Prêt Garanti par l’Etat (PGE) before the Combined General Meeting. This transaction will require a decrease in share nominal value and will be followed by a reverse stock split (100 old shares for 1 new share). Prior to the implementation of the €347 million capital increase, existing shareholders will benefit from a 627 million free shares allocation in order to reduce the dilutive impact of the transaction. If approved, the transactions may take place at the end of September 2020.

Should the plan be rejected by the Combined General Meeting on July 24, 2020, Solocal Group will have to request the termination of the existing safeguard plan (plan de sauvegarde) and the closing of the conciliation proceedings opened in March 2020. In this case, Solocal would have to announce that it is in a state of suspension of payments (état de cessation des paiements). In anticipation of this eventuality, the company already applied for a hearing with Nanterre’s Commercial Court (Tribunal de commerce de Nanterre) in order to request the opening of a receivership proceeding (redressement judiciaire) as the case may be.

Solocal Group S.A. is the leading French provider of digital local media and marketing.

The Davis Polk team included counsel Georges Terrier and associates Géraldine Fromage and Ferdinand Barbé. All members of the Davis Polk team are based in the Paris office.

White & Case advised the bondholders with a team which was led by partner Saam Golshani (Paris) and included partners Franck De Vita, Séverin Robillard, Yann Utzschneider (all Paris) and Gilles Teerlinck (London), counsel Orion Berg and associates Aurélien Loric, Hugues Racovski, François Wyon, Tiphanie Levassort and Amandine Grima (all Paris).

Involved fees earner: Cyrine Abdelmoula – Ashurst; Noam Ankri – Ashurst; Hubert Blanc-Jouvan – Ashurst; Kévin Boyero – Ashurst; Pierre Roux – Ashurst; Ferdinand Barbé – Davis Polk & Wardwell; Geraldine Fromage – Davis Polk & Wardwell; Georges Terrier – Davis Polk & Wardwell; Amanda Bevan-de Bernède – Gibson Dunn & Crutcher; Clarisse Bouchetemblé – Gibson Dunn & Crutcher; Julie Cazalet – Gibson Dunn & Crutcher; Bertrand Delaunay – Gibson Dunn & Crutcher; Jean-Pierre Farges – Gibson Dunn & Crutcher; Séverine Gallet – Gibson Dunn & Crutcher; Martin Guermonprez – Gibson Dunn & Crutcher; David Hania – Gibson Dunn & Crutcher; Ariel Harroch – Gibson Dunn & Crutcher; Clémence Martinez – Gibson Dunn & Crutcher; Julia-Barbara Michalon – Gibson Dunn & Crutcher; Charles Peugnet – Gibson Dunn & Crutcher; Matthieu Rabaud – Gibson Dunn & Crutcher; Judith Raoul-Bardy – Gibson Dunn & Crutcher; Alexandre Salvanet – Gibson Dunn & Crutcher; Orion Berg – White & Case; Franck De Vita – White & Case; Saam Golshani – White & Case; Amandine Grima – White & Case; Tiphanie Levassort – White & Case; Aurélien Loric – White & Case; Hugues Racovski – White & Case; Séverin Robillard – White & Case; Gilles Teerlinck – White & Case; Yann Utzschneider – White & Case; François Wyon – White & Case;

Law Firms: Ashurst; Davis Polk & Wardwell; Gibson Dunn & Crutcher; White & Case;

Clients: Eric Boustouller; GoldenTree Asset Management LLC; Solocal Group; Solocal Group Bondholders;

Author: Ambrogio Visconti