Scandinavian Biogas initiates a written procedure
Scandinavian Biogas Fuels International AB (publ) (the "Issuer") intend to instruct the agent for the Company's up to SEK 300,000 million senior secured bonds with ISIN SE0007784111 (the "Bonds") to initiate a written procedure requesting that the bondholders waive its maintenance covenant under the terms and conditions for the Bonds for the test periods ending on 31 March 2019 respectively 30 June 2019.
The Issuer has during 2018 reported deteriorating earnings during the past quarters, which is mainly derived by increased operational and maintenance costs at Södertörn, legal expenses related to disputes, penalty fees in South Korea, and increased costs in Norway related to the commissioning of the plant at Skogn.
As a consequence, the Issuer has, when preparing the consolidated financial statement for the fourth quarter 2018, came to the conclusion that the Issuer might not fulfil the maintenance tests for the first and second quarter of 2019, as stipulated in The Terms and Conditions (published on the Issuer’s webpage www.scandinavianbiogas.com) of the Issuer’s corporate bond loan.
As part of the waiver request, the Issuer´s balance sheet and liquidity will be strengthened by an injection of at least SEK 80 million before transaction costs. The SEK 80 million can be subordinated loans and/or part of the announced directed share issue of in total SEK 144 million, where of SEK 34 million relate to a possible conversion of loans from the major shareholders.
The Issuer is continuously working to improve its financial position and is evaluating a variety of strategic and capital-based structural alternatives aiming to secure a long-term and sustainable capital structure as well as an investment programme to substantially improve operations at the Södertörn facility. The Group expects 2019 operational profitability (EBITDA) to exceed SEK 100 million, as the plant at Skogn is expected to be fully operational and the government production grant will have a positive impact on Södertörn’s profitability.
The Issuer has been discussing the waiver request and subsequent injection of equity and/or subordinated loan with a group of the largest Bondholders, holding nearly 53% of the outstanding amount, which have confirmed their support for the waiver request, conditioned to a waiver fee of 1.00% and at least SEK 80 million before transaction costs from the directed share issue or from subordinated loans, where of at least SEK 30 million per 30 June 2019 and the remaining up to SEK 50 million per 31 August 2019.
Pareto Securities acts as financial adviser and for further information regarding the waiver request and the Issuer’s undertaking, please contact your broker at Pareto Securities.
The Group annual report 2018 is assumed to be published by end of April 2019. As earlier announced the date for being published was 29 March 2019, but considering the written procedure the report will be public later.
The interim report for the first quarter 2019 is planned to be published on 26th of April 2019.
The notice to the written procedure will be available on the Company's website (www.scandinavianbiogas.com) and on Stamdata (www.stamdata.com).
For further information, please contact:
CEO Scandinavian Biogas
+46 (0) 70-597 99 38
The company in brief:
Scandinavian Biogas is today one of the largest private producers of biogas as a vehicle fuel. The Company also operates a manufacturing plant for pre-treatment of food waste and industrial organic waste, as well as a plants for the production of raw biogas in South Korea and liquid biogas in Norway.
This information is information that Scandinavian Biogas Fuels International AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 15:45 2019 CEST on 28 March 2019.