PRISA initiated yesterday the signing process aimed at refinancing with all its banks, including those present in a syndicated loan since 2006, and holders of a bridging loan and subordinated debt, signed in 2007, as well as those holding bilateral loans.
The 2007 syndicated loan becomes due on March 19, 2014 (bullet). However, a number of factors, such as the issuance of bonds, may extend the maturity date until December 19, 2014. The maturity of the bridge loan, which doesn’t allow for partial repayments, and bilateral loans is to be extended until January 15, 2015, and if certain conditions are met, may be extended until September 19, 2015. The subordinated debt is also being extended until September 2015, when the conditions for the extension of the other loans will be met.
The agreements were signed yesterday with all PRISA’a creditor banks. It is expected that this process will be successfully concluded in the coming days, once the foreign creditor banks give the go ahead, which has not been formalized yet due to the holidays on Monday and Tuesday in the UK.
The signing of this process triggers the conversion of warrants by Timon, PRISA’s reference shareholder, Martin Franklin and Nicolas Berggruen, who will subscribe to new shares amounting to 150 million (one hundred and fifty million) euros, at a price of two euros per share.
The financial flexibility provided by the new structure will allow PRISA to concentrate on developing their businesses and on the process of transformation which it is currently undergoing, with a special focus on digital technologies.
One year ago PRISA announced a financial restructuring that included a number of operations to incorporate business partners and raise capital through the sale of minority stakes in some companies and the entry of new shareholders into the structure. DLJ South American Partners acquired 25% of Santillana; Telefonica and Mediaset España each acquired 22% of Digital+; and Miguel Pais do Amaral acquired 10% of Media Capital. There was also the sale of TV channel Cuatro to Telecinco in exchange for 17.3% of the resulting new TV company. Capital inflows came through an investment vehicle called Liberty Acquisition Holdings Corp., which brought together a large group of high-potential investors who entered the company as independent minority shareholders through a share swap between the two companies.
The result of these operations was a cash inflow of nearly 2,000 million euros for PRISA, which allowed for a significant reduction in the level of financial leverage. The refinancing agreement signed today will provide the Group with the financial position required to maintain the effective running and growth of its businesses.
The Chairman of the Executive Committee and CEO of PRISA, Juan Luis Cebrián, welcomed the agreement and commended the efforts by the creditor banks and business teams, led by the Deputy CEO, Fernando Abril Martorell. He added: "Despite the difficult times we live in, in the midst of an unprecedented global financial crisis and the profound changes in the market prompted by new technologies, the Group's results continue and will continue to demonstrate the strength of all our businesses and our ability to continue generating profits. The support of our lenders reflects the efforts made by the shareholders, executives and employees of the company aimed at consolidating this as one of the largest news, information, education and entertainment conglomerates in Spanish and Portuguese. "