17th Feb 2021 12:46
(Alliance News) - Sub-Saharan Africa banking investor Atlas Mara Ltd said Wednesday it is continuing "constructive" discussions to restructure its debt.
At the end of December, Atlas notified bondholders that it had entered into a new secured facility agreement with a fund entity managed by UBS O'Connor LLC as well as a standstill agreement with a group of creditors - representing 88% of its creditors - in respect of financing arrangements for Atlas Mara and subsidiary ABC Holdings Ltd.
ABC Holdings main brand is BancABCn which operates in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe
Included in the standstill agreement are "an ad hoc group of bondholders representing over 60% by value of the bonds".
"The objective of the standstill is to provide sufficient time for engagement between the company and its creditors to reach agreement on a sustainable long-term solution for the company's and ABCH's debt and repayment profile," Atlas explained.
As part of the standstill, consenting creditors agreed not to exercise rights or demand repayment under the convertible bonds and bilateral facilities until March 31.
Atlas said: "Since announcing the standstill agreement in December 2020, the company has continued to have a constructive dialogue with the trustee of the convertible bonds and additional bondholders above the initial 60% of principal holders and has been focussed on developing its restructuring proposal with reference to the interim milestones in the standstill."
Despite not reaching an agreement, Atlas said it continues to make progress in discussions on a proposed plan that will provide "stability for the benefit of all stakeholders".
The discussions, Atlas noted, also include plan for comprehensive recapitalisation or restructuring of the company's and ABCH's balance sheet - which involves further disposals in addition to those already announced.
In November last year, Atlas agreed to sell its banking assets in Rwanda and Tanzania to KCB Group PLC. The deals are expected to close during the first half of 2021, assuming regulatory approvals are received by then. Atlas, at the time, said the deal with KCB was "another significant milestone" in its broader repositioning.
Speaking Wednesday, Atlas said these sales will help it weather the challenges wrought by the Covid-19 pandemic.
Atlas also noted lawyers acting for one of its holdout creditors, TLG ATMA Ltd, have filed an application with the High Court of Justice of the Eastern Caribbean Supreme Court in the British Virgin Islands seeking to appoint joint liquidators for the company.
The banking investor said its outstanding debt related to TLG is about USD10.8 million, which includes accrued interest and other costs that TLG is seeking.
"By way of background, TLG and two other creditors did not agree to enter into the standstill or similar arrangement with the company, notwithstanding the benefits of the standstill to the company's creditors as a whole," Atlas said.
The company said it has continued to attempt to engage with TLG in an effort to obtain its support and agree to the standstill.
"TLG has not been receptive to these options and has instead taken a number of actions which the company believes are damaging to TLG's position and the position of the company's other creditors, including filing and subsequently withdrawing a statutory demand and culminating in the filing of the application on February 16, without proper consultation with the company," Atlas added.
"A number of significant consenting creditors have reaffirmed their support for the company by granting certain waivers as a result of these hostile actions taken by TLG."
If TLG does not withdraw the legal application, Atlas said it will "robustly" contest the move.
"The company continues to have support from a significant majority of creditors as a result of the standstill and intends to continue working towards the successful implementation of a restructuring and divestiture programme in order to maximise value for its creditors and other stakeholders, recognising that there is a risk of insufficient value for shareholders if the company is unable to do so," Atlas said.
Shares in Atlas Mara were 5.0% lower in London on Wednesday midday at USD0.38 each. The stock is down 62% over the past 12 months.
By Paul McGowan; [email protected]
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