REG - Gwynt y Mor OFTO PLC - Gwynt y Mor OFTO plc announce consent solicitation
26 March 2021
THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIES AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014
Gwynt y Môr OFTO plc
(incorporated with limited liability in England and Wales with registered number 08796159)announces a consent solicitation
Gwynt y Môr OFTO plc (the Issuer) today announced a consent solicitation (the Consent Solicitation) in respect of £339,215,000 2.778 per cent. Secured Bonds due February 2034 (XS1175846580) (the "Bonds"):
Capitalised terms used in this announcement and not defined herein have the meanings given to such terms in the solicitation memorandum dated 26 March 2021 (the Solicitation Memorandum). This announcement does not contain the full terms and conditions of the Consent Solicitation, which are contained in the Solicitation Memorandum. Subject to the restrictions described under "Solicitation and Distribution Restrictions" below, Bondholders may obtain a copy of the Solicitation Memorandum from the Tabulation Agent, the contact details for which are set out below.
Purpose of this Announcement
The purpose of this announcement is to provide information on the STID Proposal which is the subject of the Consent Solitication, for which see "The STID Proposal".
Background
The Issuer has previously notified bondholders of a fault that occurred on SSEC3 in October 2020 (the Cable Failure). That fault has now been repaired and the cable has been re-energised. However some faults remain with the fibre optic cables in this circuit ( the FOC Faults) and the Issuer intends to remove the remaining FOC faults as soon as practicable (a Future Repair) as they indicate the potential for a power core fault in the future.
The STID Proposal
To address this the Issuer is seeking consent through the STID Proposal to access sufficient liquidity over March 2021 to September 2022 to ensure the Future Repair costs can be met and provide sufficient flexibility to implement the Future Repair at the most appropriate and cost effective time.
In order to cover costs associated with the Cable Failure (including amounts due under the Repair Contract and delay costs), the Issuer now seeks the consent of the Security Trustee to apply amounts in the Debt Service Reserve Account and Emergency Reserve Account to meet Operating Costs, debt service costs or reactive maintenance expenditure attributable to outages or repairs. In order to effect this, the Issuer wishes to transfer amounts standing to the credit of the Debt Service Reserve Account and Emergency Reserve Account to the Working Capital Reserve Account and to utilise amounts standing to the credit of the Working Capital Reserve Account to meet Operating Costs, debt service costs or reactive maintenance expenditure attributable to outages or repairs. In addition, any amounts drawn under the PBCE Letter of Credit and debited to the Debt Service & PBCE Account will be transferred to the Operating Account.
Whilst the Issuer is seeking a temporary waiver of the requirement to fund the Debt Service Reserve Account, Emergency Reserve Account and the Debt Service & PBCE Account, the Issuer is not seeking a waiver to permit any Restricted Payment to be made which would otherwise be prohibited in accordance with paragraph 19 (Restricted Payments) of Part 3 (General Covenants) of Schedule 2 (Covenants) to the CTA. For the avoidance of doubt, no Restricted Payments may be made during the waiver period (which will occur until the earlier of (i) 29 September 2022 and (ii) such earlier date as the Issuer will notify the Security Trustee in writing, if the Issuer considers that cable repair work has been performed ahead of schedule or the waivers contained in the STID Proposal are otherwise no longer required).
The Issuer is also seeking consent to allow the PBCE Letter of Credit to be drawn to reimburse Scheduled Debt Service in respect of the 31 March 2021 Scheduled Payment Date. The terms of the STID Proposal provide that a PBCE Rebalancing Event will not arise in respect of amounts drawn under the PBCE Letter of Credit in respect of the Scheduled Payment Dates falling on 31 March 2021, 30 September 2021 and 31 March 2022.
The OFTO is also seeking to make a technical change to the definition of "LIBOR" in the PBCE Letter of Credit and Reimbursement Deed to address the discontinuation of LIBOR. This will take effect as a permanent amendment to the PBCE Letter of Credit and Reimbursement Deed.
Comfort Package
The Issuer proposes that if consents and waivers set out above are granted, it will comply with certain conditions:
· provide a quarterly report prepared by the Technical Advisor in respect of the repair work;
· comply with the following information covenants during the waiver period which including:
o delivery of a repair plan to the Technical Advisor setting out expenditure and proposals;
o obtain confirmation from the Technical Advisor that repair plan is in accordance with Prudent Operating Practice;
o submit a monthly summary of costs and seek confirmation from the Technical Advisor if the repair costs are in excess of 105% of the costs set out the corresponding Calculation Period;
· engage Bishopsfield Capital Partners Limited as advisor to the Bondholders;
· hold investor update conference calls in the two months following each Calculation Date during the waiver period.
· restrict the amount drawn under the PBCE Letter of Credit (excluding interest) to £24,231,159.70; and
· prohibit Restricted Payments during the waiver period.
Expected Timetable
The times and dates below (other than the Expiration Time) are indicative only. Accordingly, the actual timetable may differ significantly from the expected timetable set out below.
All references to times are to London time unless otherwise stated, and any announcements or notifications to be made to Bondholders arising out of or in connection with the STID Proposal will be made as soon as is reasonably practicable after the event giving rise to the announcement or notification by the Issuer in accordance with the provisions of the Bond Trust Deed and the Bonds.
All notices to Bondholders will be given by delivery through the Clearing Systems.
Event
Date
Announcement and delivery of the STID Proposal.
Friday 26 March 2021
Solicitation Memorandum to be made available at the specified office of the Tabulation Agent (copies of which are obtainable by Bondholders upon request, free of charge).
Instruction Fee Deadline Latest time and date for receipt of valid Electronic
Voting Instructions by the Tabulation Agent through the Clearing Systems for
holders to be eligible for payment of the Instruction Fee.
Thursday 6 May 2021
Expiration Time
Latest time and date for receipt of valid Electronic Voting Instructions by the Tabulation Agent through the Clearing Systems.
4.00 p.m. (London time)
on Wednesday 19 May 2021
STID Voting Deadline
Thursday 20 May 2021
Announcement of results of the STID Proposal
Friday 21 May 2021 or earlier subject to the STID Proposal, should the Security Trustee have received votes in favour of the STID Proposal from 66.67% % of Senior Voting Debt
If the STID Proposal is approved and the Borrower Security Trustee has announced such approval
Payment of the Instruction Fee to those holders who are eligible for payment in accordance with the conditions set out in the Solicitation Memorandum.
On the Payment Date which is expected to be on or about the fifth Business Day following the announcement of the results of the STID Proposal, if the STID Proposal is approved.
Execution and implementation of the STID Proposal
Currently expected to occur within five Business Days of the STID Voting Deadline (but, in any event, to be implemented at a time which is at Gwynt y Môr OFTO plc's sole and absolute discretion).
Bondholders or Beneficial Owners are advised to check with the bank, securities broker, trust company, custodian, Clearing System or other intermediary through which they hold their Bonds whether such intermediary applies different deadlines for any of the events specified above, and then to adhere to such deadlines if such deadlines are prior to the deadlines set out above.
All of the above dates are subject to earlier deadlines that may be set by the Clearing Systems or any intermediary.
Instruction Fee
Subject to the conditions set out in the Solicitation Memorandum, including the approval of the STID Proposal by the requisite proportion of the Senior Voting Debt and the announcement by the Security Trustee of such approval, holders of the Bonds who have delivered a valid Electronic Voting Instruction in respect of the STID Proposal which has been received by the Tabulation Agent at or prior to the Expiration Time, which has not been validly withdrawn following the Expiration Time and which remains in full force and effect until the announcement of the results of the STID Proposal, will be entitled to receive a fee equal to 0.10 per cent. of the Outstanding Principal Amount of such Bonds which are the subject of the relevant Electronic Voting Instruction (the Instruction Fee). The Instruction Fee will be paid on the Payment Date via the relevant Clearing System for payment to the cash account of an eligible holder of Bonds in such Clearing System. The payment of any such amounts to the relevant Clearing System will discharge the obligations of the Issuer in respect of the Instruction Fee to all such relevant Bondholders.
Creditor Support
Special Committee of the Investment Association
The STID Proposal set out in the Solicitation Memorandum has been considered by a special committee of the Investment Association (the Special Committee) at the request of the Issuer. The members of the Special Committee, who hold in aggregate approximately 68.86 per cent. of the Outstanding Principal Amount of the Bonds have examined the STID Proposal. They have informed the Issuer that they find the STID Proposal acceptable and, subject to client and other approvals, they intend to vote in favour of the STID Proposal in respect of their holdings of Bonds.
The Special Committee has advised the Issuer that this recommendation relates only to the STID Proposal set out in this Solicitation Memorandum and not to any future offers or proposals which the Issuer may make.
General
Subject to applicable law and as provided herein, the relevant Issuer may, in its sole discretion, amend the terms of (save for the Expiration Time), terminate or withdraw the Consent Solicitation at any time up to the Solicitation Amendment Deadline.
Bondholders are advised to check with the bank, securities broker, trust company, custodian, Clearing System or other intermediary through which they hold their Bonds whether such intermediary will apply different deadlines for participation to those set out in the Solicitation Memorandum and, if so, should adhere to such deadlines if such deadlines are prior to the deadlines set out in the Solicitation Memorandum.
In relation to the delivery of Electronic Voting Instructions, in each case, through the Clearing Systems, Bondholders holding Bonds in Euroclear or Clearstream, Luxembourg should note the particular practice of the relevant Clearing System, including any earlier deadlines set by such Clearing System.
Only direct accountholders in Euroclear or Clearstream, Luxembourg may deliver Electronic Voting Instructions. Bondholders who are not direct accountholders in Euroclear or Clearstream, Luxembourg should arrange for the accountholder through which they hold their Bonds to deliver an Electronic Voting Instruction on their behalf to the relevant Clearing System as more particularly described in the Solicitation Memorandum. The deadlines specified by the relevant Clearing System may be earlier than the Expiration Time.
Bondholders are advised to read the Solicitation Memorandum carefully for full details of, and information on the procedures for participating in, the Consent Solicitation.
Further Information
Bondholders may contact the Tabulation Agent for further information, whose contact details are included below.
Questions or requests for assistance with respect to the procedures for participating in the Consent Solicitation, in connection with the delivery of Electronic Voting Instructions may be directed to the Tabulation Agent, whose contact details are included below:
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
United Kingdom
Telephone: +44 20 7547 5000
Attention: CT - Trust & Agency Services
Email: xchange.offer@db.com
Reports available to Bondholders
Bishopsfield Capital Partners (BCP) have been appointed as advisers solely to bondholders to:
1. Prepare a Situation Analysis Report relative to the STID Proposal; and
2. Monitor, during the Waiver Period, the OFTO's compliance with the conditions described in paragraph 2.6 of the STID Proposal and compliance with the Information Covenants described in the CTA. BCP will be invited to prepare an addendum to each Investor Report (to be published on the Designated Website) confirming the monitoring activities undertaken by BCP through the relevant period and indicating any compliance exceptions identified.
Bondholders are invited to access the Situation Analysis Report by request to the Tabulation Agent who will request that BCP deliver the Situation Analysis Report by email to the relevant Bondholder.
Bondholders are also able to obtain the following reports on request to the Tabulation Agent:
3. The executive summary of a report prepared by Southhampton Dielectric Consultants in 2020 relating to Gwynt y Môr Subsea Export Cable 3; and
4. A Technical Note prepared by the Lenders Technical Advisor dated 9 March 2021.
Disclaimer
This announcement must be read in conjunction with the Solicitation Memorandum. None of the Tabulation Agent, the Bond Trustee, the Security Trustee, or the Principal Paying Agent takes any responsibility for the contents of this announcement and none of the Tabulation Agent, the Bond Trustee, the Security Trustee, or the Principal Paying Agent or any of their respective directors, officers, employees or affiliates makes any representation or recommendation whatsoever regarding the STID Proposal, or expresses any opinion as to whether Bondholders should participate in the STID Proposal or vote in favour of or against the STID Proposal. The Solicitation Memorandum contains important information which should be read carefully before any decision is made with respect to the Consent Solicitation. If any Bondholder is in doubt as to the action it should take, it is recommended to seek its own financial, legal or other advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant, independent financial adviser authorised under the Financial Services and Markets Act 2000 (if in the United Kingdom) or other appropriately authorised financial adviser. Any individual or company whose Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the Consent Solicitation. None ofthe Tabulation Agent, the Security Trustee or the Bond Trustee accepts any responsibility for the contents of this announcement.
Market Abuse Regulation
This announcement is released by the Issuer and contains information in relation to the Bonds that qualified as inside information for the purposes of the Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing information relating to the Bonds. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this Notice is made by Simon Rooke, Director.
The distribution of the Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Solicitation Memorandum comes are required by the Issuer, the Obligors, and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.
The Solicitation Memorandum contains important information which should be read carefully before any decision is made with respect to the Consent Solicitation.
The communication by the Issuer of the Solicitation Memorandum and any other documents or materials relating to the Consent Solicitation is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended (the "FSMA"). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. Such documents and/or materials are only directed at and may only be communicated to (1) any person within Article 43(2) of the (Financial Services and Markets Act 2000 (Financial Promotion) Order 2005), which includes a creditor or member of the Issuer, and (2) to any other persons to whom these documents and/or materials may lawfully be communicated in circumstances where section 21(1) of the FSMA does not apply.
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