References/4 Jul 2022
Borenius advised SRV on the reorganisation of its balance sheet
We advised SRV on the reorganisation of the company’s financing in connection with the write-down of its Russian and Fennovoima assets totalling EUR 141.2 million.
The ongoing reorganisation includes a EUR 35 million rights issue, the conversion of the company’s existing EUR 100 million and EUR 75 million unsecured fixed-interest bonds (with a cumulative outstanding amount of EUR 104.3 million) into hybrid convertible bonds in a written procedure or, alternatively, the tender of the bonds at 60% of their nominal value, using the EUR 45 million and the EUR 58.4 million hybrid bonds (with a cumulative outstanding amount of EUR 15.4 million) to subscribe the company’s shares for 45% of the hybrid bonds’ principal and haircut the remaining 55%, and the extension and amendment of the company’s existing credit facility.
We secured a tax decision, which allowed SRV to benefit from the haircuts without any tax consequences. We also handled complex capital markets disclosure and sanctions issues, the evaluation of various restructuring options, and negotiations with multiple instrument classes. In addition, we assisted SRV with the structuring and issuance of the first-ever convertible IFRS hybrid bond and provided corporate law support to the company and its board.
The reorganisation has strong support from SRV’s largest shareholders and its bond and hybrid bond holders as well as banks, which is why the company trusts that the programme will be implemented. Upon the completion of the reorganisation, the company will be almost free of net debt (IFRS 16 adjusted), and its Russia related risks will be small.
SRV operates a good, healthy construction business in Finland.