4th Aug 2005 18:10
Wolverhampton& Dudley Breweries PLC04 August 2005 4 August 2005 THE WOLVERHAMPTON & DUDLEY BREWERIES, PLC Debt refinancing terms announcement and formal notice of redemption Further to the announcements on 8th July and 1st August, The Wolverhampton &Dudley Breweries, PLC ("W&DB", and together with its subsidiaries the "W&DBGroup" or "the Group") has finalised the terms of the refinancing of the Group'sdebentures and bank debt via a securitisation of £805m backed by approximately70% (by number of pubs) of the Group's managed and tenanted pub estate. W&DB hasalso finalised the terms of a new £250m bank facility that will further enablethe Group to increase financial flexibility. The terms of the securitisation, the debenture exchange and debenture redemptionare announced today. It is expected that the transaction will be completed nextweek. The new debt structure comprising the securitisation and bank facilitywill deliver significant benefits to W&DB enabling it to: • reduce the cash interest cost by approximately £5m per annum,• extend the weighted average maturity of its debt from 7 years to 16 years,• simplify the debt structure through the refinancing of its six debentures,• increase debt capacity, and• maintain operational flexibility within the new debt structure. The bond issue was received very favourably by the markets and the transactionwas over-subscribed for all tranches. The transaction was arranged by The RoyalBank of Scotland plc, and the bonds were placed by Barclays Capital, HSBC Bankplc and The Royal Bank of Scotland plc as the joint lead managers. The bankfacility was arranged by Barclays Capital and HSBC Bank plc. The bond pricing reflects historically low gilt yields and as a result the totalweighted average interest rate achieved in the securitisation financing isattractive and lower than recent comparable transactions in the sector. Thesecuritisation transaction priced at the following levels: Tranche Rating Type Amount PricingA1 A FRN £236m Libor +55bp1A2 A Fixed £214m 5.1576%A3 A Fixed £200m 5.1774%B BBB Fixed £155m 5.6410%Total £805m Note 1: The FRNs are fully hedged Following the favourable outcome of the debentureholder votes announced on 1stAugust, W&DB is proceeding with the exchange or redemption of all of the sixseries of debentures. The exchange and redemption process does not trigger thepayment of early redemption penalties under the terms of the debentures. The£245m of debentures are to be redeemed or exchanged for £288m of cash and newsecuritisation notes reflecting the above market interest rates of the existingdebentures and the lower interest rates and margins payable on the newsecuritisation notes. The refinancing will result in the Group incurring an exceptional charge in thisfinancial year of approximately £23m net of tax as a result of the redemption ofthe two shorter dated debentures and an increase in the nominal amount of debtdue to the exchange of the four longer dated debentures. The cash interestsaving as a result of the refinancing will be approximately £5m per annum, andthe ongoing interest cost charged to the profit and loss account will be reducedby approximately £3m per annum. The difference reflects the fact thathistorically the interest cost charged to the profit and loss account hasbenefited from £2m of non-cash fair value provision adjustments relating to therefinanced debentures, and which will be eliminated as a consequence of therefinancing. Paul Inglett, Finance Director, said: "The new debt structure will significantlyreduce W&DB's interest costs, whilst providing increased debt capacity andmaintaining operational flexibility for the future development of the estate." Additionally, W&DB intends to apply £29m of the refinancing proceeds to make aone-off contribution to the W&DB Final Salary Pension Scheme. After thiscontribution, the FRS17 deficit of the Group's pension schemes, post tax, willbe approximately £30m. Formal notice of redemption by W&DB Notice is hereby given by W&DB that, pursuant to and in accordance withCondition 2(C) of: (i) the Trust Deed dated 11 February 1992 (as amended andsupplemented from time to time) between, inter alia, W&DB and The Law DebentureCorporation p.l.c. as trustee for the holders of the £15,000,000 101/4 per cent.Debenture Stock due 2012 (the 2012 Stock); (ii) the Trust Deed dated 18 June1998 (as amended and supplemented from time to time) between, inter alia, W&DBand The Law Debenture Corporation p.l.c. as trustee for the holders of the£125,000,000 61/2 per cent. Debenture Stock due 2019 (the 2019 Stock); and (iii)the Trust Deed dated 11 November 1997 (as amended and supplemented from time totime) between, inter alia, W&DB and The Law Debenture Corporation p.l.c. astrustee for the holders of the £30,000,000 7.25 per cent. Debenture Stock due2027 (the 2027 Stock), (the 2012 Stock, the 2019 Stock and the 2027 Stock,together the W&DB Stock), W&DB will be redeeming the W&DB Stock on 9 August2005. Formal notice of redemption by Mansfield Brewery Limited Notice is hereby given by Mansfield Brewery Limited (Mansfield) that, pursuantto and in accordance with Condition 2(C) of: (i) the Trust Deed dated 5 July1985 (as amended and supplemented from time to time) between, inter alia,Mansfield and Phoenix Assurance Public Limited Company as trustee for theholders of the £20,000,000 111/2 per cent. Debenture Stock due 2010 (the 2010Stock); and (ii) the Trust Deed dated 3 March 1998 (as amended and supplementedfrom time to time) between, inter alia, Mansfield and Phoenix Assurance PublicLimited Company as trustee for the holders of the £30,000,000 6.875 per cent.Debenture Stock due 2028 (the 2028 Stock); (the 2010 Stock and the 2028 Stock,together the Mansfield Stock), Mansfield will be redeeming the Mansfield Stockon 9 August 2005. Formal notice of redemption Burtonwood Group Limited Notice is hereby given by Burtonwood Group Limited (Burtonwood) that, pursuantto and in accordance with Condition 2(C) of the Trust Deed dated 18 March 1999(as amended and supplemented from time to time) between, inter alia, Burtonwoodand Royal Exchange Trust Company Limited as trustee for the holders of the£25,000,000 61/2 per cent. Debenture Stock due 2024 (the Burtonwood Stock),Burtonwood will be redeeming the Burtonwood Stock on 9 August 2005. Contact details The Wolverhampton & Dudley Breweries, PLC Ralph Findlay, Chief Executive 01902 329 516 [email protected] Inglett, Finance Director 01902 329 516 [email protected] The Royal Bank of Scotland plc (Securitisation Arranger and Solicitation Agent) Andrew Burton 020 7085 8056 [email protected] Jackson 020 7085 4208 [email protected] NM Rothschild & Sons Limited (Financial Adviser to W&DB) Kenneth White 020 7280 5701 [email protected] Smyth 020 7280 5719 [email protected] gcg hudson sandler (PR Adviser to W&DB) Andrew Hayes 020 7796 4133 [email protected] Lyon 020 7796 4133 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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