REG - Dignity PLC - Consent solicitation with Noteholders

DignityAnnouncement

07/09/2022 16:00

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RNS Number : 6415Y  Dignity PLC  07 September 2022

 FOR IMMEDIATE RELEASE  7 September 2022

 

Dignity plc
("Dignity", the "Company" or the "Group")

CONSENT SOLICITATION WITH NOTEHOLDERS

Proposal offers additional financial flexibility and deleveraging for the
Group

Dignity, the UK's leading provider of funeral plans and end of life services,
notes the announcement made today by Dignity Finance PLC ("Dignity Finance"),
a Group subsidiary, of the launch of a consent solicitation with its
Noteholders in relation to a deleveraging proposal ("Consent Proposal").

As stated in the Group's 2021 annual results, following the award of a
temporary covenant waiver by the Class A Noteholders, the Company has
continued to work on a long term solution to improve the Group's capital
structure. As part of implementing this strategy, Dignity is now seeking
certain consents from Noteholders for a potential transaction involving the
realisation of value from selected crematoria assets, with the proceeds of
such a transaction being applied in a partial redemption of the Class A Notes,
as required by the current documentation. These consents, if approved, will
apply for 12 months following approval by the Class A Noteholders.

As part of the Consent Proposal, Dignity is also seeking a series of
amendments to provisions within the financing documents in order to provide
operational flexibilities and to bring the Dignity financing structure more in
line with recent securitisation structures.

As a condition to this Consent Proposal, Dignity will be required to inject a
minimum of £70 million into the securitisation group companies to partially
repay some of the Class A Notes outstanding (including the payment of a
redemption premium) in consideration for assets leaving the securitisation
group, if a potential transaction in relation to the crematoria assets becomes
unconditional within 12 months of the Class A Noteholders' approval referred
to above. This will result in a deleveraging of the Group and a positive
impact on the underlying financial ratios.

The assets which are subject to the proposals are seven crematoria where the
freehold and leasehold properties are owned by companies outside of the
securitisation group and leased to Dignity Funerals Limited (a company in the
financing ringfence). The portfolio is expected to generate a total of £6.7m
EBITDA (2022 Budget) for the Group. As part of any potential transaction
involving these crematoria assets, Dignity may enter into an agreement to
continue to operate these assets (e.g. a master services agreement).

Dignity Finance has accordingly launched a Consent Proposal with its Class A
Noteholders. Further information on the Consent Proposal can be found within
the announcement made by Dignity Finance.

The Consent Proposal has been considered by a special committee (the "Special
Committee") consisting of Noteholders and convened by The Investment
Association at the request of Dignity Finance. The members of the Special
Committee, who hold in aggregate approximately 61 per cent of the current
principal amount outstanding of the Class A Notes have examined the proposal
and have informed Dignity Finance that they find it acceptable.

 

Kate Davidson, Chief Executive of Dignity, commented: "The proposal announced
today marks a key milestone in ensuring the Company's capital structure
supports our new strategic goals and vision for the Group. If Noteholder
consent is provided, it would enhance operational flexibilities in alignment
with recent securitisation terms and unlock greater investment into our
properties, facilities and people, to grow and strengthen Dignity."

 

For further information please contact:

 Kate Davidson, Chief Executive                      +44 (0) 20 7466 5000

Dean Moore, Interim Chief Financial Officer

Dignity plc

 Chris Lane                                          +44 (0) 20 7466 5000

Hannah Ratcliff                                    Dignity@buchanan.uk.com (mailto:Dignity@buchanan.uk.com)

Verity Parker

Buchanan
 www.buchanan.uk.com (http://www.buchanan.uk.com/)

 

Forward-looking statements

This announcement and the Dignity plc investor website may contain certain
'forward-looking statements' with respect to Dignity plc ('the Company') and
the Group's financial condition, results of its operations and business, and
certain plans, strategy, objectives, goals and expectations with respect to
these items and the economies and markets in which the Group operates.

 

Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as 'anticipates', 'aims', 'due',
'could', 'may', 'should', 'will', 'would', 'expects', 'believes', 'intends',
'plans', 'targets', 'goal' or 'estimates' or, in each case, their negative or
other variations or comparable terminology. Forward-looking statements are not
guarantees of future performance. By their very nature forward-looking
statements are inherently unpredictable, speculative and involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. The forward-looking statements in this announcement
are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including, without limitation, management's examination
of historical operating trends, data contained in the Company's records and
other data available from third parties. Many of these assumptions, risks and
uncertainties relate to factors that are beyond the Group's ability to control
or estimate precisely. There are a number of such factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forward-looking statements. These factors include, but are
not limited to, changes in the economies and markets in which the Group
operates; changes in the legal, regulatory and competition frameworks in which
the Group operates; changes in the markets from which the Group raises
finance; the strength of competitors; the impact of legal or other proceedings
against or which affect the Group; future plans and potential for future
growth; changes in accounting practices and interpretation of accounting
standards under IFRS, and changes in interest and exchange rates. Although the
Company believes that these assumptions were reasonable when made, these
assumptions are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are beyond its
control, and the Company may not achieve or accomplish these expectations,
beliefs or projections. Neither the Company, nor any of its members,
directors, officers, agents, employees or advisers intend or have any duty or
obligation to supplement, amend, update or revise any of the forward-looking
statements contained in this announcement.

 

Any forward-looking statements made in this announcement or the Dignity plc
investor website, or made subsequently, which are attributable to the Company
or any other member of the Group, or persons acting on their behalf, are
expressly qualified in their entirety by the factors referred to above. Each
forward-looking statement speaks only as of the date it is made. Except as
required by its legal or statutory obligations, the Company does not intend to
update any forward-looking statements.

 

 

 

Nothing in this announcement or on the Dignity plc investor website should be
construed as a profit forecast or an invitation to deal in the securities of
the Company.

 

Legal Entity Identifier number:

Dignity plc - 21380049687CNAYKV483

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