NOTICE – FOR IMMEDIATE RELEASE
THIS NOTICE CONTAINS IMPORTANT INFORMATION OF INTEREST TO THE HOLDERS OF THE NOTES.
This Notice requires your immediate attention. If you are in any doubt as to the action you should take, you are recommended to seek your own financial and legal advice as appropriate immediately from your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act 2000 (if you are in the United Kingdom), or from another appropriately authorised independent financial or legal adviser.
If you have recently sold or otherwise transferred your entire holding(s) of Notes referred to below, you should immediately forward this document to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
FERNANDO SSN PLC
(a public limited company incorporated under the laws of England and Wales
(registered number 12318024), whose registered office is at
8th Floor, 100 Bishopsgate London EC2N 4AG
(the “Issuer”)
GBP 370,651,451.74 Secured Guaranteed Floating Rate Notes due 2026
(the “Notes”)
NOTICE TO UPDATE HOLDERS OF THE NOTES (THE “NOTEHOLDERS”)
ON THE POTENTIAL SALES PROCESS
As notified to Noteholders in a notice dated 6 January 2021, the boards of each of (a) Fernando HoldCo Limited (“Fernando HoldCo”), the indirect shareholder of the Issuer and (b) Fernando PropCo Holdings Limited (“PropCo Holdings” together with Fernando HoldCo, the “Fernando Companies”), a wholly-owned subsidiary of the Issuer, engaged PricewaterhouseCoopers LLP (“PwC”) as an adviser to both of the Fernando Companies with effect from 6 January 2021 to examine and assist the boards of the Fernando Companies in a potential sale or sales of the business of the Fernando Companies or the shares that PropCo Holdings holds in various portfolio companies that own properties in the United Kingdom (the “Potential Sales Process”).
Capitalised terms used but not defined in this Notice shall have the meaning set out in the amended and restated master definitions and framework deed dated 25 September 2020 to which the Issuer and the Fernando Companies, among others, are a party.
The Issuer wishes to update Noteholders on the status of the Potential Sales Process.
Negotiations between prospective purchasers, PwC and the boards of the Fernando Companies have been ongoing since January 2021. The boards of the Fernando Companies initially received a number of indications of interest to acquire the business of the Fernando Companies or the shares that PropCo Holdings holds in various portfolio companies, and as of June 2022, the directors of the Fernando Companies were in advanced discussions with several bidders whose offers valued the whole portfolio in the range £540m to £560m. However, all bids were subject to various conditions, including availability and quantum of financing, which bidders were unable to finalise and which became impacted by worsening macroeconomic conditions.
Lack of progress on proposed leasehold reform, the effects of the recent Building Safety Act, and a rising and exceedingly volatile interest rate environment resulted in these levels of bidder interest reducing. From June 2022 to present, PwC have also been seeking expressions of interest in an alternative structure involving a sale of the shares in the Issuer, following which only the SSNs would remain outstanding. Any such sale would require the SSN Holders to waive the mandatory redemption of the SSNs arising from the resultant change of control.
During early September 2022, the boards of the Fernando Companies, in consultation with the JSN Committee, were giving preliminary consideration to one of the indicative bids received in this process in particular, which represented an offer ranging from £24m to £40m for the shares in the Issuer with SSNs remaining outstanding on existing terms, subject to certain further conditionality. This corresponded to a portfolio valuation of circa £376m to £392m based on the SSN outstanding amount of £352m at the time. Discussions with SSN Holders in relation to the change of control consent have not concluded and, on 30 September 2022, the prospective bidder indicated to PwC that, due to increasing interest rates and economic volatility, it could not proceed with its indicative bid. Following discussions between the boards of the Fernando Companies, PwC and the JSN Committee, the boards of the Fernando Companies have decided not to proceed with a transaction at this point in time and are ceasing the marketing process until economic conditions are considered more favourable.
All enquiries in relation to this Notice should be addressed to:
OGIER CORPORATE FINANCE LIMITED
Listing Agent
Tel: +44 1481 721672
14 October 2022