LONDON, July 1 (LPC) – Holders of senior secured notes (SSNs) of Dutch retailer Hema are set to take over the business through a debt-for-stock swap, with more than 80% of note holders agreeing to debt restructuring, banking sources said.

On June 15, the company was blocked because 100% of its RCF lenders and 62% of its € 600 million SSN 2022 agreed to the restructuring. However, a threshold of 75% of SSN support was required before the agreement could be implemented.

About 80% of SSNs now support the deal, which means it can move forward, one of the sources said.

Under the terms of the debt restructuring, 300 million euros of SSN will be amortized against almost 100% of the business. Existing management may retain a small percentage of the business, one of the sources said.

SSNs will also provide a liquidity injection of € 42 million, via private placement notes.

Hema’s € 150 million 2023 senior unsecured bonds will be fully written off, but its € 80 million revolving credit facility will remain in place.

The restructuring will reduce the company’s cash interest payments to around € 30 million, from around € 50 million per year.

The restructuring is expected to be completed by September, the source said.

In April, Hema, owned by Dutch billionaire Marcel Boekhoorn through his investment vehicle Ramphastos Investments, appointed Goldman Sachs to advise on debt restructuring. The company’s senior covered bond holders have mandated Moelis.

Hema and Ramphastos Investments were not immediately available for comment.

The company, which was already struggling with high debt, was hit even more by the impact of Covid-19.

“The group’s current level of indebtedness, instituted under the previous ownership, was not sustainable, it limited our ability to execute our strategic plans and would have limited our growth in the future”, said Tjeerd Jegen, CEO of Hema, in a statement released earlier today. month.

“Although our business has resisted in recent months, the Covid-19 pandemic has exacerbated the stress on the group’s financial situation and accelerated the need to address our capital structure issues,” he said.

Hema forecasts a 12.6% drop in revenue to 1.1 billion euros by the end of 2020, compared to 2019. 2020 pro forma adjusted EBITDA is expected to fall to 46 million euros. euros, or 56% less than the 105 million euros in 2019.

Hema was bought by Ramphastos from Lion Capital for an undisclosed amount in 2018. Lion Capital bought Hema in 2007 from the Dutch distribution group Maxeda for around 1.1 billion euros, backed by 900 million euros in debt.

Hema is a general merchandise retailer, offering clothing, home, personal care and food products and operates a network of over 750 stores primarily in the Benelux but also in France, Germany, Spain and the UK . (Edited by Claire Rukin)