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Ettevõte AS Pro Kapital Grupp
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Avaldamise aeg 10 juuni 2021 22:10:00 +0300
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Pealkiri Bondholders plan to waive the temporary financial covenant failure and have signed a standstill letter
Tekst
AS  Pro Kapital Grupp (the "Company") has published interim report of the 1(st)
quarter  2021, in which  it has  written-off receivables  from its subsidiary AS
Tallinna  Moekombinaat ("TMK") as a result  of TMK's bankruptcy proceedings. The
Company  is, due to this,  in temporary failure to  meet its financial covenants
(the  "Covenant Failure")  under its  senior secured  callable fixed  rate bonds
2020/2024 with ISIN SE0013801172 (the "Bonds").

The  Estonian  Supreme  Court's  decision  dated  26 April  2021 has  led  to  a
termination  of  TMK's  reorganisation  proceedings  and the start of bankruptcy
proceedings  regarding TMK. As a result, a retroactive write-off of TMK's direct
parent  company's, AS  Pro Kapital  Eesti, receivables  in TMK as of 31 December
2020 took  place, which in turn led the Company to a situation where it has been
in breach of its special undertaking under the terms and conditions of the Bonds
(the  "Terms and Conditions") since 31 December 2020. According to the Terms and
Conditions, the Company has to meet a Maintenance Test at all times, namely that
the  ratio of equity to  total assets has to  be 35% for the group without TMK's
financial  indicators. As a result  of an adjusting event  and a thereto related
write-off, the ratio of equity to total assets dropped from 50% to 32% as of 31
December  2020. However, the Covenant Failure is  deemed to be temporary and the
Company will, according to its estimates, meet the required levels in the second
half   of   the  year  2021. The  Company  has  started  negotiations  with  the
bondholders.

Today  the  Company  received  a  standstill  letter  from  a  majority  of  the
bondholders  representing 75.44% of the  total nominal amount  of the Bonds (the
"Major Bondholders"), stating that the Major Bondholders shall:

  * waive any right to take actions against the Company for the Covenant Failure
    and/or any other potential breach of the Company's obligations under the
    Terms and Conditions due to the bankruptcy and/or the write-off event; and
  * agree with the Company on a standstill period which will last until the
    earlier of 31 August 2021, the date on which the waiver is approved by the
    bondholders in a written procedure (the "Written Procedure") held in
    accordance with the Terms and Conditions or the date the standstill period
    lapses due to the breach by the Company of the conditions described below
    (the "Standstill Period"), it being understood that the waiver to be given
    in the written procedure shall be valid until 31 December 2021.

The Major Bondholders undertake and agree during the Standstill Period to:

  * not instruct the Agent (Nordic Trustee & Agency AB (publ)) or vote in favour
    in any Written Procedure of any proposal, to accelerate the Bonds and/or
    enforce the transaction security under the Terms and Conditions or the
    security documents, as applicable, due to any potential Event of Default
    under the Terms and Conditions or any circumstance which could result in an
    Event of Default under of the Terms and Conditions and/or or take any other
    action against the Company, due to the bankruptcy and the write-off event;
  * participate in and vote in favour of the waiver request in the Written
    Procedure; and
  * not divest the Bonds which each of them represent unless the seller of any
    Bonds ensures that the purchaser of such Bonds accedes to the undertakings
    in the standstill letter.

The  obligations of  the members  of the  Major Bondholders under the standstill
letter are separate and not joint.

The  agreements  and  undertakings  set  out  above are subject to the following
conditions:

  * the Company acknowledges and agrees to the standstill letter in writing on
    the date hereof;
  * the Company initiates the Written Procedure relating to the waiver request
    on 10 July 2021 at the latest and that the notice of such Written Procedure
    also includes an Additional Interest; and
  * the publication of this press release.

If  any of the conditions set out above  are not met/are breached, and such non-
compliance and/or breach has not been remedied within two (2) business days from
the  moment that the Agent or the  Major Bondholders has notified the Company of
such  non-compliance and/or breach the Standstill Period shall automatically and
immediately lapse.

Provided  that the waiver request is approved by a requisite majority (i.e. 2/3
of  votes) of the bondholders, the Interest payable to the bondholders under the
Bonds  shall be increased by one hundred  (100.00) basis points per annum during
the period commencing on 1 January 2021 and ending when the Covenant Failure has
been  cured according to (i) a Compliance Certificate duly issued by the Company
pursuant to the Terms and Conditions and (ii) a certificate issued by an auditor
(the "Additional Interest"). The part of the Additional Interest attributable to
the  Interest Period ending on the  last Interest Payment Date (i.e. 20 February
2021), shall  be paid  on the  next applicable  Interest Payment  Date (i.e. 20
August 2021).

The  Standstill Period may be extended and  the standstill letter may be amended
if so agreed upon by the Major Bondholders and the Company in writing.

The  Company has agreed  to the conditions  described above and  will initiate a
Written  Procedure to have the official voting for a waiver conducted as soon as
possible.




Allan Remmelkoor
Member of the Management Board
+372 614 4920
prokapital@prokapital.ee (mailto:prokapital@prokapital.ee)