RASCHKE VON KNOBELSDORFF HEISER Dienstleistungsgesellschaft mbH

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Nachricht vom 19.05.2017 | 15:06

RASCHKE VON KNOBELSDORFF HEISER Dienstleis-tungsgesellschaft mbH invites to a second informational tele-phone conference (news with additional features)

DGAP-News: RASCHKE VON KNOBELSDORFF HEISER Dienstleistungsgesellschaft mbH / Key word(s): Bond

19.05.2017 / 15:06
The issuer is solely responsible for the content of this announcement.


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RASCHKE VON KNOBELSDORFF HEISER Dienstleistungsgesellschaft mbH invites to a second informational telephone conference

(WKN: A1TNA3/ISIN: DE000A1TNA39)

19 May 2017
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  • Invitation to a second informational telephone conference on 24 May 2017
  • Current status report
  • The designated joint representative encourages the bondholders to take part in the second noteholders meeting on 1 June 2017 in Hamburg

The Hamburg-based RASCHKE VON KNOBELSDORFF HEISER Dienstleistungsgesellschaft mbH ("RKH Dienstleistung GmbH"), which was suggested by the Management Board of Rickmers Holding AG as a candidate for the office of joint representative, is inviting all bondholders of Rickmers Holding AG's 8.875 % corporate bond 2013/2018 (WKN: A1TNA3/ISIN: DE000A1TNA39) to a second informational telephone conference in connection with the planned restructuring.

The second informational telephone conference will be held on 24 May 2017 from 9:00 a.m. to 10:30 a.m. in German and from 11:00 a.m. to 12:30 p.m. in English.

Bondholders who wish to take part in this telephone conference and to be informed on the further developments are asked to register by sending a request by e-mail or post to the address below by 23 May 2017, accompanied by an up-to-date (not older than three weeks) account statement (Depotauszug) proving their status as bondholder. The dial-in data required to enter the telephone conference will be forwarded to registered bondholders by 23 May 2017.

In the following, please find a report on the current status of our candidacy:

In the wake of our first informational telephone conference which took place on 4 May 2017, we received numerous inquiries and suggestions with regard to the planned reorganization of the Rickmers Group and the restructuring of the corporate bond issued by Rickmers Holding AG. All of these questions were answered either directly by us, or they were included in the constantly updated list of questions and answers (Q&A) on the Rickmers Holding AG's website. Together with the provision of the current draft of the IDW S6 expert report ("IDW S6 Expert Report") and of the liquidation valuation report, comprehensive information has been provided to the bondholders in the meantime.

Against this backdrop, we are under the impression that we were able to convey the proposed reorganization and restructuring concept to the interested bondholders in an understandable and reasonable manner on the basis of comprehensive information.

In this context we wish to point out that until today bondholders representing a nominal volume of more than EUR 30 million have declared in writing to support our candidacy as well as the present restructuring concept.

Nonetheless, there are still certain sensibilities that were communicated to us by bondholders and that relate primarily to the following three aspects:

(i) Can it really be assumed that the company proposed by Rickmers Holding AG as joint representative of the bondholders, RKH Dienstleistung GmbH, will represent the interests of the bondholders in an independent manner?

(ii) How can I be sure that we will not be able to obtain a better result for the bondholders through further negotiations with the banks and the shareholder of Rickmers Holding AG?

(iii) How can it be ensured that the value recovery realised by selling the 75.1 % interest of LuxCo in Rickmers Holding AG is as high as possible?


(i) Regarding the independence of RKH Dienstleistung GmbH

The independence of RKH Dienstleistung GmbH was questioned repeatedly, in particular by the proponents of alternative resolutions to be proposed to the noteholders' meeting, who were arguing that RKH Dienstleistung GmbH had already been involved in the negotiation of the reorganization and restructuring concept with the stakeholders prior to its publication.

The claim of alleged dependence is completely baseless. We have always endeavored to protect and represent only the interests of the bondholders, and we will continue to do so in the future. Neither has there ever been any dissent on this matter with the Management Board and the Supervisory Board of Rickmers Holding AG, nor have RKH Dienstleistung GmbH or its sole shareholder, Raschke von Knobelsdorff Heiser Partnerschaft von Rechtsanwälten mbB, counseled Rickmers Holding AG, its shareholder, or its group companies on legal matters ever before.

On the contrary, our nomination by Rickmers Holding AG was based especially on our reputation as independent and high level law firm, which the sole shareholder of RKH Dienstleistung GmbH has been able to establish in the Hamburg market but also in the broader German market over the past 12+ years.

Our independence is not affected by the fact that we were already partially involved in the talks and negotiations on the reorganization and restructuring concept prior to a vote on our appointment as joint representative. Apart from the fact that this is an entirely normal procedure in connection with the restructuring of corporate bonds, our involvement was of special importance in particular because on the date on which the resolution is passed by the bondholders, a fully negotiated reorganization and restructuring concept had to already be available in order to receive confirmation, through the IDW S6 Expert Report, that the company can be reorganized and that the prognosis for its continued existence is positive (positive Fortführungsprognose). Without our timely involvement, the interests of the bondholders in these negotiations could have only been represented solely by Rickmers Holding AG, which it would not have been able to do with the same credibility and power of persuasion. Moreover, this involvement has also enabled us to report to the bondholders directly from these negotiations and to convey to them a sense of what - at least from our perspective - was financially feasible.

We would also like to clarify that, even though it is true that we were already approached by the Management Board of Rickmers Holding AG in September 2016 regarding whether we would contemplate a candidacy for the office of joint representative of the bondholders. However, back then, Rickmers Holding AG was still pursuing an entirely different concept. It was initially planning to ask the creditor meeting to pass a resolution on a moratorium on the interest payment scheduled for 11 June 2017 and the election and authorization of a joint representative who was to then negotiate a reorganization and restructuring concept with all stakeholders that would not require any major concessions (so called amend and extent concept). We did not get involved in the negotiations and talks with the lenders until February 2017, when it became apparent that this amend and extend concept could no longer be implemented because of the requirement for a positive prognosis on business reorganization, and that a reorganization and restructuring concept with a stronger focus on debt relief would be required.

We expressly ask all bondholders to not allow themselves to be misled by statements to the contrary, bearing in mind that they may have been made in pursuit of individual financial interests that are not aligned with those of the bondholders. Such statements are completely untrue, and from our perspective, utterly unreliable.

(ii) Regarding the question of whether it might be possible to obtain a better result for the bondholders through further negotiations

In light of the negotiated contributions by the lenders and the sole shareholder of Rickmers Holding AG, we believe that the reorganization and restructuring concept presented by Rickmers Holding AG is reasonable, and that given the current situation, there really is no feasible economical alternative.

Given our partial involvement in the talks and negotiations, we can confirm, in particular, that also in our view, a compromise was reached with all stakeholders after long and hard negotiations, and that no party was willing to make any further significant concessions.

If the proposed reorganization and restructuring concept fails to gain the required majority of votes at the upcoming second noteholders' meeting on 1 June 2017, or if said noteholders' meeting fails to reach the required attendance quorum of 25 % of the bond volume, we believe that it is highly likely that Rickmers Holding AG will go into insolvency, given that the positive prognosis for the continued existence of Rickmers Holding AG on which this reorganization and restructuring concept is based would no longer be given. We further believe that it is rather unlikely in such a case that there would still be any room for negotiation in order to get the other lenders and possibly also the sole shareholder of Rickmers Holding AG to make any significant additional concessions.

In the event of a potential insolvency of Rickmers Holding AG, the bondholders would initially not receive any payments at all, and they would most certainly not be able to collect the interest payment scheduled for 11 June 2017 under the reorganization and restructuring concept presented. The insolvency dividend which the bondholders can expect in such a case is probably somewhere between around 2.3 % in the "worst case scenario" and around 5.5 % in the "best case scenario", based on the assumptions and calculations, as of 31 March 2017 as reference date, underlying the liquidation value report prepared by Brinkmann & Partner. The interest payment scheduled for 11 June 2017 under the reorganization and restructuring concept of Rickmers Holding AG alone should already realise more value for the bondholders than the insolvency scenario.In addition, the reorganization and restructuring concept proposed by Rickmers Holding AG allows for the possibility of realising a pro rata value recovery by selling the 75.1 % interest of the yet-to-be-established LuxCo in Rickmers Holding AG (see also under (iii)).

We therefore see no alternative solution that would achieve a better financial result for the bondholders than the reorganization and restructuring concept presented by Rickmers Holding AG in the proposal for resolution.

(iii) Regarding the question of ensuring the highest possible value recovery

Under the reorganization and restructuring concept presented by Rickmers Holding AG in their proposal for resolution, essentially the only way bondholders can realise a value recovery other than the interest payment on 11 June 2017 (and other at least theoretically conceivable dividends), is by selling the 75.1 % new shares in Rickmers Holding AG that are to be issued to LuxCo. According to up-to-date calculations by Rickmers Holding AG, the bondholders will receive 62 % and HSH Nordbank AG 38 % of the proceeds from the sale of these shares, minus any costs incurred at the level of LuxCo.

Therefore, the joint representative elected by the noteholders' meeting must focus its attention primarily on this sale in order to ensure the highest possible selling price for the benefit of the bondholders through critical and constructive input within the scope of the authority, power of attorney, and directions given by the noteholders' meeting. In this regard, the joint representative will have a veto right enabling it to prevent a sale - if necessary even against the will of HSH Nordbank AG.

However, the joint representative must also take into account that - except if agreed otherwise between the joint representative and HSH Nordbank - a sale needs to be completed by no later than the end of the first quarter 2020. Otherwise, there would be a forced sale of the shares, which could, as experience shows, likely result in a lower value recovery than a sale of the shares under a structured selling process. In making its decision concerning the exercise of its veto right, the joint representative will therefore also have to assess whether an alternative sale on better terms and conditions would even seem likely.

Regardless thereof, LuxCo will only be authorized to sell its shares in Rickmers Holding AG if the consideration offered for these shares matches or exceeds the value of these shares (including a potential control premium), which has to be ascertained for LuxCo in a valuation report by an independent and qualified expert, in the selection of whom the joint representative will likewise have a veto right. If the purchase price being offered is deemed reasonable, the joint representative shall be authorized to approve a sale.

Against this backdrop, we have taken the initiative to retain the services of nexpert AG, a Hamburg-based, highly qualified and experienced consulting company in the restructuring industry, to assist us, in particular, in verifying the plausibility of the IDW S6 Expert Report and to calculate possible value recovery potentials based on the assumptions made in the IDW S6 Expert Report.

The calculations that are available to us confirm that, based on the assumptions underlying the IDW S6 Expert Report, it appears possible that a value recovery potential of up to 40 % can be achieved (taking into account the interest payment to be made on 11 June 2017). However, the timing of the sale will be crucial because it is expected that the value recovery will increase over time due to the presumed positive effects of the reorganization contributions from the creditors and the shareholder on the business operations of Rickmers Holding AG and due to the presumed recovery of the shipping market underlying the IDW S6 Expert Report.

On the one hand, it is true that both creditors, the bondholders as well as HSH Nordbank AG, should be interested in realising the highest possible proceeds from the sale of the shares as the only way to achieve a partial recovery of the "waived" accounts receivable. However, HSH Nordbank AG may also have to consider other interests in assessing a purchase price offer, because it continues to hold significant investments at the level of the group companies and might be willing to accept a lower purchase price for the shares in Rickmers Holding AG if this improves the prospects for the repayment of their loans at the "lower" level.

It will therefore be important for the joint representative to reach a reasonable compromise with HSH Nordbank AG on the right timing of the sale, the amount of the purchase price, and the volume of shares to be sold. At the same time, however, the joint representative will also endeavor to ensure that various sales scenarios are discussed and negotiated with a potential investor.

In order to be able to achieve the highest possible value recovery potential for the bondholders, we will consider, in particular, the following scenarios:

- sale of the entire 75.1 % of the shares at various times up until the end of the first quarter of 2020, potentially with a retroactive purchase price increase in the event that the positive effects assumed in the IDW S6 Expert Report materialize only after the sale (so-called earn-out);

- sale of the 75.1 % of the shares in several tranches on staggered dates, potentially with the right or obligation of LuxCo to sell any tranches initially not sold to the investor at a later point in time (so-called put/call option);

- where legally possible, "individual" sale of the 75.1 % of the shares, making it possible for the bondholders to decide outside of a noteholders' meeting to not participate financially in a sale and to remain a bondholder of LuxCo in order to participate in a possible value recovery potential at a later point in time.


The theoretically realisable proceeds by the bondholders in case of a sale (62 % of the sales proceeds after deduction of costs) on the basis of the assumptions underlying the IDW S6 Expert Report with regard to a sale of 25.1 %, 50.1 %, and 75.1 % of the shares in Rickmers Holding AG at different times using as an EBITDA multiple of 7.00 are, in a simplified manner, shown in a visualization with related explanatory notes attached as Annex A to this press release.

This simplified and schematic visualization shows, using an EBITDA multiple, that a sale of the shares in 2017 is not expected to lead to a significant value recovery for the benefit of the bondholders, and that a financially relevant value recovery can be achieved only as of 2019.

A much earlier value recovery onset could be achieved if the so-called discounted cash flow (DCF) method is used to determine a reasonable purchase price as shown in the further simplified and schematic visualization with related explanatory notes attached as Annex B to this press release.

Both visualizations show that the method to be used in calculating the purchase price is likewise of significant importance for the value recovery potential for the benefit of the bondholders.

Whether and to what extent an optimal value recovery will be achievable depends on a large number of circumstances which are not yet fully assessable.

In order to at least clearly show where our focus would lie in the event that we were appointed as joint representative of the bondholders, we already engaged in talks with Rickmers Holding AG and HSH Nordbank AG on a possible structuring of the sales process.

In light of all this, we are confident that by pursuing this approach, a possibly high value recovery potential for the benefit of the bondholders may be reached.

Last but not least, in light of the repeated ambiguous and incorrect representations by third parties in this regard, we would like to make it very clear that the liquidity payment of (up to) USD 54.1 million for repayment of HSH Nordbank AG provided for in the reorganization and restructuring concept, which a potential investor has to make in addition as a so-called "fresh money contribution", will not be deducted from the purchase price for the shares. It is an additional payment to be made by the investor.
 

Disclaimer

The above stated press release with Annex A and Annex B contains forward-looking statements that are subject to various risks and uncertainties, which are outside the sphere of influence of both, RKH Dienstleistung GmbH and the Management Board of Rickmers Holding AG. Such forward-looking statements are based on current forecasts, expectations and estimates at the time of their publication and constitute neither promises nor guarantees. These risks and uncertainties may lead to actual circumstances differing materially from the statements herein. RKH Dienstleistung GmbH in such case assumes no liability and no obligation to update or adjust the forward-looking statements contained in the above stated press release with Annex A and Annex B to reflect events or circumstances after the date of this press release.

Further information and supporting documentation for the second noteholders' meeting is available on the Rickmers Holding AG's website at www.rickmers.com/investors.

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Contact

RASCHKE VON KNOBELSDORFF HEISER Dienstleistungsgesellschaft mbH
Dr. Kristian J. Heiser
Wexstraße 16
20355 Hamburg
phone: +49 (0) 40 86643363
(on Mondays, Wednesdays and Fridays from 10:00 am until noon)
e-mail: dienstleistung@rkh-law.de

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Background

RKH Dienstleistung GmbH located in Hamburg, registered in the commercial register of the local court of Hamburg under HRB 145610, is a service provider which was founded to act as common representative of bondholders pursuant to the German Act on Issues of Debt Securities (Schuldverschreibungsgesetz). Managing director of RKH Dienstleistung GmbH is lawyer (Rechtsanwalt) Dr. Kristian J. Heiser, LL.M. Sole shareholder of RKH Dienstleistung GmbH is the Hamburg-based Raschke von Knobelsdorff Heiser Partnerschaft von Rechtsanwälten mbB ("RKH") which is one of the leading German corporate/M&A boutiques. RKH was established in 2005 as spin-off of its founding partners from Freshfields Bruckhaus Deringer. RKH is focused on legal high-end advice to German and international industrial and commercial clients, private equity companies as well as banks and other financial service providers in the areas M&A/private equity, corporate law as well as banking and capital market law.


Additional features:

Document: http://n.eqs.com/c/fncls.ssp?u=IDMXWFQENL
Document title: 170519 3. Pressemitteilung Annex A und B (englisch)


19.05.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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