TIDMERO1
RNS Number : 3293S
Eros Media World PLC
08 March 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMED (THE "UK MARKET ABUSE
REGULATION").
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO
ANY PERSON LOCATED OR RESIDENT IN ANY JURISDICTION WHERE IT IS
UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.
EROS MEDIA WORLD PLC
(formerly, EROS STX GLOBAL CORPORATION)
ANNOUNCES REPURCHASE AND CONSENT SOLICITATION IN RESPECT OF
ITS
GBP50,000,000 8.50 PER CENT. UNSECURED BONDS DUE 2023
(the "Bonds")
(ISIN: XS1112834608)
8 March 2023
Eros Media World PLC (formerly, Eros STX Global Corporation)
(incorporated as a limited company and registered in the Isle of
Man under the Companies Act 2006 (Isle of Man) with company number
007466V) (the " Company ") today announces the launch of (i) a
Repurchase and (ii) a Consent Solicitation (each as defined below)
in respect of the Bonds on the terms set out in the repurchase and
consent solicitation memorandum in respect of the Bonds (the "
Repurchase and Consent Solicitation Memorandum ") dated today's
date and prepared by the Company.
Capitalised terms used but not defined herein shall have the
same meanings as in the Repurchase and Consent Solicitation
Memorandum.
Details of the Consent Solicitation
The Company has today invited holders of the Bonds:
(a) to offer for repurchase on 15 April 2023 up to GBP25,000,000
in aggregate nominal amount of the Bonds for cash (the " Repurchase
") at the Purchase Price specified below; and
(b) to approve certain modifications (as further described in
the Repurchase and Consent Solicitation Memorandum) to (i) the
terms and conditions of the Bonds (the " Conditions ") contained
within the trust deed dated 15 October 2014 as supplemented by a
first supplemental trust deed dated 10 April 2017 and a second
supplemental trust deed dated 20 September 2021, each between the
Company and U.S. Bank Trustees Limited as Trustee (together, the "
Trust Deed "), (ii) the Trust Deed and (iii) the agency agreement
dated 15 October 2014 made between, inter alios, the Company and
the Trustee relating to the Bonds, as previously supplemented by a
supplemental agency agreement dated 20 September 2021 between,
inter alios, the Company and the Trustee in relation to the Bonds
(together the " Agency Agreement "), and the waiver of the breach
of certain provisions of the Conditions and of the Trust Deed and
any related Event of Default or Potential Event of Default; and to
approve the appointment of a new trustee to replace U.S. Bank
Trustees Limited as Trustee (and waiver of any actual or potential
breach of related provisions of the Trust Deed), all as further
described in the Repurchase and Consent Solicitation Memorandum
(the " Consent Solicitation ", and together with the Repurchase,
each an " Invitation " and together the " Invitations ") for
approval by Extraordinary Resolution at a meeting of Bondholders
(such meeting being the " Meeting ").
This announcement does not contain details of the full terms and
conditions of the Repurchase and the Consent Solicitation, which
are contained in the Repurchase and Consent Solicitation
Memorandum. Holders of the Bonds may obtain a copy of the
Repurchase and Consent Solicitation Memorandum from Kroll Issuer
Services Limited, who is acting as Tender, Tabulation and
Information Agent in connection with the Repurchase and the Consent
Solicitation and whose contact details are set out at the end of
this announcement.
Holders of the Bonds are advised to carefully read the
Repurchase and Consent Solicitation Memorandum and are reminded
that the below is a summary only of the terms of the Consent
Solicitation.
Details of the Bonds
Description of Current Maturity Outstanding Purchase
the Bonds Common Code/ISIN Date(1) nominal amount Price(2) Consent Fee(3)
---------------- ----------------- ----------------- ---------------- ---------------- ----------------
GBP50,000,000 111283460/ 15 April 2023 GBP50,000,000 GBP60 per GBP0.50 per
8.50 per cent. XS1112834608 GBP100 in GBP100 in
Bonds due 2023 nominal amount nominal amount]
---------------- ----------------- ----------------- ---------------- ---------------- ----------------
(1) For the avoidance of doubt, all Bondholders (including any
Bondholders whose Bonds are accepted for repurchase in the
Repurchase) shall receive the interest payment falling to be paid
on 17 April 2023 (15 April 2023 being a Saturday).
(2) Bondholders whose Bonds are accepted for repurchase in the
Repurchase will receive the Purchase Price but will not receive any
interest for the period from (and including) 15 April 2023 to the
Payment Date (which is expected to be no later than 21 April
2023).
(3) Bondholders who submit (and do not revoke) either (i) valid
Repurchase Instructions, or (ii) valid Voting Instructions (voting
for the Extraordinary Resolution), in each case which are received
by the Tender, Tabulation and Information Agent on or before the
Final Deadline, will be eligible to receive the Consent Fee if the
Extraordinary Resolution is passed and the Proposals are
implemented.
The Meeting
A notice (the " Notice ") convening the Meeting to be held at
10.00 a.m. (London time) on 30 March 2023 via teleconference has
been given to Bondholders in accordance with the Trust Deed on the
date of this announcement. At the Meeting, Bondholders will be
invited to consider and, if thought fit, pass an extraordinary
resolution (the " Extraordinary Resolution ") to approve the
Proposals as more fully described in the Notice.
The quorum required for the Meeting is two or more persons
present holding or representing not less than 75 per cent. in
aggregate nominal amount of the Bonds for the time being
outstanding. To be passed, the Extraordinary Resolution requires a
majority in favour of at least 75 per cent. of the votes cast in
respect of the Extraordinary Resolution at the Meeting. If passed,
the Extraordinary Resolution shall be binding on all Bondholders,
whether present or not present at the Meeting and whether or not
voting.
The implementation of the Extraordinary Resolution, if passed,
is conditional on the Company not having previously terminated the
Consent Solicitation in accordance with the provisions for such
termination set out in the Repurchase and Consent Solicitation
Memorandum under the heading " Amendment and Termination ".
Under the Trust Deed, subject to all other provisions therein,
the Trustee may prescribe such further regulations regarding the
holding of meetings of Bondholders and attendance and voting at
them as the Trustee may in its sole discretion determine. For the
purpose of the Meeting, the Trustee has prescribed certain virtual
meeting guidelines and regulations.
The Meeting will be held via teleconference using a platform
hosted by the chairman of the Meeting to allow attendees to
participate electronically. Details for accessing the Meeting (or
any adjourned Meeting) will be made available to proxies who have
been duly appointed under a block voting instruction, or to holders
of voting certificates issued, in accordance with the procedures
set out in the Repurchase and Consent Solicitation Memorandum. Such
proxies and holders of voting certificates will be contacted by the
Tender, Tabulation and Information Agent (whose contact details are
set out in the Repurchase and Consent Solicitation Memorandum) at
least 24 hours before the Meeting in order to ensure that they are
provided with the necessary information for attending and
communicating their votes during the Meeting via
teleconference.
Participating in the Repurchase
To participate in the Repurchase, a holder of the Bonds should
deliver, or arrange to have delivered on its behalf, via the
relevant Clearing System and in accordance with the requirements of
such Clearing System, a valid Repurchase Instruction to be received
by the Tender, Tabulation and Information Agent by 4.00 p.m.
(London time) on 27 March 2023 (the " Final Deadline ").
By participating in the Repurchase through the submission of
valid Repurchase Instructions at or prior to the Final Deadline,
such Bondholders will automatically instruct the Tender, Tabulation
and Information Agent to arrange for the appointment of one or more
representatives of the Tender, Tabulation and Information Agent as
a proxy to vote in favour of the Extraordinary Resolution at the
Meeting (or any adjourned Meeting).
Bondholders who submit (and do not validly revoke) Repurchase
Instructions before the Final Deadline will be deemed to have voted
in favour of the Extraordinary Resolution, and accordingly will be
eligible to receive the Consent Fee (as defined herein) (even if
not all of the Bonds in respect of which a Repurchase Instruction
is given are accepted for repurchase by the Company). It is not
possible to submit a Repurchase Instruction and vote against the
Extraordinary Resolution.
The Company will not accept offers of Bonds for repurchase (or
pay the Consent Fee) if the Extraordinary Resolution is not passed
and the Proposals are not implemented.
The Company proposes to repurchase in cash up to GBP25,000,000
in aggregate nominal amount of Bonds offered for repurchase in the
Repurchase. As at the date of this announcement, the Company
expects to repurchase not less than GBP15,000,000 in aggregate
nominal amount of the Bonds, but the Company reserves the right to
determine, in its sole discretion, the aggregate nominal of Bonds
to be repurchased depending on (among other things) the aggregate
nominal amount of the Bonds that are offered for repurchase. The
Company shall give notice of the aggregate nominal amount of the
Bonds to be repurchased (the " Repurchase Total ") as soon as
practicable after the Final Deadline. If the aggregate nominal
amount of Bonds offered for repurchase is greater than the
Repurchase Total, the Company shall scale back all acceptances
received on a pro rata basis.
Participating in the Consent Solicitation
To participate in the Consent Solicitation, a holder of the
Bonds should deliver, or arrange to have delivered on its behalf,
via the relevant Clearing System and in accordance with the
requirements of such Clearing System, a valid Voting Instruction,
to be received by the Tender, Tabulation and Information Agent by
the Final Deadline.
Any Bondholder may be eligible, on the terms and conditions set
out in the Repurchase and Consent Solicitation Memorandum, to the
extent permitted by applicable laws and regulations, to receive an
amount of GBP0.50 per GBP100 in nominal amount of the Bonds in
respect of which the relevant Bondholder submits a Voting
Instruction voting for the Extraordinary Resolution in accordance
with the procedure described below and in the Repurchase and
Consent Solicitation Memorandum (the " Consent Fee ").
To be eligible for the Consent Fee, such Voting Instructions
must be received by the Tender, Tabulation and Information Agent
from Bondholders on or before the Final Deadline. Voting
Instructions must be submitted in respect of a minimum principal
amount of the Bonds of no less than GBP100, being the minimum
denomination of the Bonds.
Holders of the Bonds that do not deliver a Repurchase
Instruction or Voting Instruction in accordance with the preceding
paragraphs, but who wish to attend and vote at the Meeting in
person or to be represented or otherwise to vote at the Meeting,
must make the necessary arrangements in accordance with the Notice
and the Meeting Provisions (as defined in the Repurchase and
Consent Solicitation Memorandum) by the Final Deadline. Such
holders will not be eligible to receive the Consent Fee.
Payment of the Consent Fee is subject to (i) the delivery of a
valid Voting Instruction in respect of the Extraordinary Resolution
to the Tender, Tabulation and Information Agent on or before the
Final Deadline, (ii) such Voting Instruction not being revoked (in
the limited circumstances in which such revocation is permitted
described in " Amendment and Termination - Consent Solicitation
Revocation Rights " in the Repurchase and Consent Solicitation
Memorandum), (iii) the Extraordinary Resolution being duly passed
and the Proposals implemented and (iv) the Company not having
previously terminated the Consent Solicitation or the Proposals in
accordance with the provisions for such termination set out in "
Amendment and Termination " in the Repurchase and Consent
Solicitation Memorandum.
Repurchase Instructions and Voting Instructions will be
irrevocable except in the limited circumstances described in the
Repurchase and Consent Solicitation Memorandum under the heading
"Amendment and Termination".
Indicative timetable for the Offers
Set out below are the indicative timetables applicable to the
Repurchase and the Consent Solicitation. The Principal Timetable
applies where the Meeting is quorate on the date on which it is
first held, and the Alternative Timetable applies where the Meeting
is not quorate on the date on which it is first held and is
therefore adjourned. Bondholders should note that these timetables
will depend, among other things, on timely receipt (and
non-revocation) of instructions, the right of the Company to
extend, re-open, amend and/or terminate the Repurchase or the
Consent Solicitation (other than the terms of the Extraordinary
Resolution) as described in the Repurchase and Consent Solicitation
Memorandum not being exercised, and the passing of the
Extraordinary Resolution at either the first Meeting or (if
applicable) any adjourned Meeting. Accordingly, the actual
timetable may differ significantly from either of the timetables
below.
Principal Timetable
The following timetable assumes that the Meeting is quorate on
the date on which it is first held.
Date and time Event
8 March 2023 Launch Date
Repurchase and Consent Solicitation announced
and Repurchase and Consent Solicitation Memorandum
available from the Tender, Tabulation and
Information Agent, subject to offer and distribution
restrictions.
Notice of Repurchase and Consent Solicitation
published via Regulatory News Service ("
RNS ") and by delivery of notices to the
Clearing Systems.
27 March 2023 Final Deadline
at 4.00 p.m. Deadline for (i) receipt by the Tender, Tabulation
(London time) and Information Agent of (a) valid Repurchase
Instructions in respect of the Repurchase
or (b) valid Voting Instructions voting for
the Extraordinary Resolution, (ii) receipt
by the Tender, Tabulation and Information
Agent of valid Voting Instructions voting
against the Extraordinary Resolution or (iii)
Bondholders to make any other arrangements
to attend or be represented at, or to vote
on the Extraordinary Resolution at, the Meeting.
30 March 2023 Meeting
at 10.00 a.m. Meeting to be held via teleconference.
(London time)
Expected to be Announcement of Results
as soon as reasonably Announcement by the Company of the results
practicable after of the Meeting and the aggregate nominal
the Meeting amount of Bonds to be repurchased, published
via RNS.
As soon as reasonably Execution of the Third Supplemental Trust
practicable after Deed and the Second Supplemental Agency Agreement
the Meeting If the Extraordinary Resolution is passed
at the Meeting, subject to the conditions
described in the Repurchase and Consent Solicitation
Memorandum, execution of the Third Supplemental
Trust Deed and the Second Supplemental Agency
Agreement.
Upon execution of the Third Supplemental
Trust Deed and the Second Supplemental Agency
Agreement, the modifications to the Conditions,
the Trust Deed and the Agency Agreement,
the waiver of the relevant provisions of
the Conditions and the Trust Deed and any
related Event of Default or Potential Event
of Default will become effective.
17 April 2023 Payment of interest
Payment to all Bondholders of interest payable
for the interest period ending 15 April 2023
(15 April 2023 being a Saturday).
Expected to be Payment Date
no later than Subject to the Consent Solicitation being
21 April 2023 approved and implemented, date on which payment
of the Purchase Price for the Bonds accepted
for repurchase and settlement of such repurchases
is expected to be made.
No later than Payment of the Consent Fee.
30 calendar days
after the date
on which the
Proposals have
been approved
Alternative Timetable
The following table sets out the timetable as from 30 March 2023
if the Meeting is not quorate on the date on which it is first held
and, accordingly, it is adjourned.
Date and time Event
30 March 2023 Notice of adjourned Meeting published via
RNS and by delivery of notices to the Clearing
Systems.
13 April 2023 Adjourned Meeting
at 10.00 a.m. Meeting to be held via teleconference.
(London time)
Expected to be Announcement of Results
as soon as reasonably Announcement by the Company of the results
practicable after of the adjourned Meeting and the aggregate
the Meeting nominal amount of Bonds to be repurchased,
published via RNS.
As soon as reasonably Execution of the Third Supplemental Trust
practicable after Deed and the Second Supplemental Agency Agreement
the Meeting If the Extraordinary Resolution is passed
at the adjourned Meeting, subject to the conditions
described in the Repurchase and Consent Solicitation
Memorandum, execution of the Third Supplemental
Trust Deed and the Second Supplemental Agency
Agreement.
Upon execution of the Third Supplemental Trust
Deed and the Second Supplemental Agency Agreement,
the modifications to the Conditions, the Trust
Deed and the Agency Agreement, the waiver
of the relevant provisions of the Conditions
and the Trust Deed and any related Event of
Default or Potential Event of Default will
become effective.
17 April 2023 Payment of interest
Payment to all Bondholders of interest payable
for the interest period ending 15 April 2023
(15 April 2023 being a Saturday).
Expected to be Payment Date
no later than Subject to the Consent Solicitation being
21 April 2023 approved and implemented, date on which payment
of the Purchase Price for the Bonds accepted
for repurchase and settlement of such repurchases
is expected to be made.
No later than Payment of the Consent Fee.
30 calendar days
after the date
on which the
Proposals have
been approved
Bondholders are advised to check with any bank, securities
broker or other intermediary or nominee institution (including
through CDIs in CREST) through which they hold Bonds whether such
intermediary would require to receive instructions to participate
in the Consent Solicitation before the deadlines specified above.
The deadlines set by any such nominee, CREST and each Clearing
System for the submission of Repurchase Instructions or Voting
Instructions will also be earlier than the relevant deadlines
above.
Rationale for and background to the Repurchase and the Consent
Solicitation
On 20 September 2021, the Company (then known as Eros STX Global
Corporation) obtained consent from the requisite majority of
Bondholders to extend the maturity date of the Bonds to 15 April
2023, in order to give the Company sufficient time to access
additional liquidity to fund its operations and to allow it to
continue trading as a going concern while its film business,
particularly in India, recovered from the COVID-19 pandemic. The
Company also obtained Bondholder consent to certain other waivers,
including in relation to the timing of provision to the Trustee of
copies of its annual financial statements for the year ended 31
March 2021 and financial statements for the six months ended 30
September 2021. As part of the consent process, the rate of
interest on the Bonds was increased from 6.50 per cent. per annum
to 8.50 per cent. per annum.
On 7 December 2021, the Company entered into a definitive
agreement to sell its STX Entertainment subsidiary (" STX
Entertainment ") to an affiliate of The Najafi Companies (" Najafi
"), with Najafi acquiring all issued and outstanding shares of
common stock of a parent entity of STX Entertainment and repaying
an outstanding senior credit facility of STX Entertainment (the "
Senior Credit Facility "). The sale of STX Entertainment to Najafi
and repayment of the Senior Credit Facility and other subordinated
credit facilities were completed on 25 April 2022. Following the
sale of STX Entertainment, the Company was renamed "Eros Media
World PLC" on 25 May 2022.
The sale of STX Entertainment was necessary to enable the
Company to pursue its long-term strategy and to maximise long-term
value for its shareholders, but it has left a legacy of complex
financial reporting and other transition issues. While the Company
has been diligently working to address such issues, the remaining
transition and financial reporting issues have caused a delay in
the Company's timely filing of annual and semi-annual reports and
other reporting obligations. This has also had a significant impact
on the financial position of the Company, which the Company has
been working hard to improve ever since.
Ongoing impact of the COVID-19 outbreak on the Company
The COVID-19 outbreak caused significant disruptions to the
Company's global operations by restraining the production and
distribution of film content, particularly in the Company's primary
market of India. The pandemic affected how film content was
distributed to various distribution channels due to the closure of
cinemas in the United States, India and international territories.
There was, however, an increase in streaming and digital licensing
revenue for the Company's films due to the closure of cinemas.
As measures to mitigate the spread of COVID-19 have eased or
been removed in most countries, the Company is working on a
business transformation, recognising the growth in digital
businesses driven by the pandemic and emergence of technologies
such as blockchain and non-fungible tokens (" NFT "). The number of
online video users in India has grown to over 500 million users in
2022, with a 52 per cent. increase in time spent as compared to
pre-pandemic levels. Going forward, the Company will be focused on
leveraging the value of its content library (one of the world's
largest Indian language film libraries with over 3,000 titles),
monetising the library to meet the demand for content across
streamers, cable and satellite companies and resurgent theatrical
window in India. The Company will also continue to focus on
direct-to-customer relationships through its Eros Now streaming
platform, with a view of improving overall penetration and
distribution of Eros Now as a service to further regions in India,
and migrating existing subscribers to higher average revenue per
user (ARPU) plans. This business transformation will take time to
implement fully.
Rationale for the Invitations
As part of the Company's efforts to optimise its debt structure
and cost of capital, the Company is offering to repurchase for cash
up to GBP25,000,000 nominal amount of Bonds at the Purchase Price
on 15 April 2023 as further described below, using cash made
available from the realisation of contracted receivables due from
the Company's subsidiaries.
The Company is also inviting Bondholders to approve (1) the
Company making certain modifications to (i) the terms and
conditions of the Bonds (the " Conditions ") contained within the
Trust Deed, (ii) the Trust Deed and (iii) the Agency Agreement, (2)
the waiver of the breach of certain provisions of the Conditions
and of the Trust Deed and any related Event of Default or Potential
Event of Default and (3) the appointment of a new trust corporation
to replace U.S. Bank Trustees Limited as Trustee (and waiver of any
actual or potential breach of related provisions of the Trust
Deed).
The Company is offering the Consent Fee to any Bondholder that
either (i) offers its Bonds for repurchase in the Repurchase (even
if not all of the Bonds in respect of which a Repurchase
Instruction is given are accepted for repurchase by the Company),
or (ii) votes in favour of the Extraordinary Resolution in the
Consent Solicitation. Bondholders who vote against the
Extraordinary Resolution, or abstain from voting on the
Extraordinary Resolution, or fail to submit Repurchase Instructions
or Voting Instructions, or who submit but then validly revoke
Repurchase Instructions or Voting Instructions, will not be
eligible to receive the Consent Fee. The Consent Fee will only be
payable if the Extraordinary Resolution is passed and the Proposals
are implemented.
1. Extension of the maturity of the Bonds and increase in rate
of interest payable on the Bonds
The Company is proposing to extend the maturity of the Bonds to
enable it to access the liquidity that is required to fund its
operations and allow it to continue its business transformation
following the COVID-19 pandemic and the sale of STX
Entertainment.
The Company is also offering an increase in the rate of interest
payable on the Bonds from 8.50 per cent. to 9.00 per cent. per
annum.
2. Introduction of new covenant restricting Eros International
Media Limited (India) from incurring or maintaining indebtedness in
excess of the Debt Limit
The Company is proposing the introduction of an additional
covenant restricting Eros International Media Limited (India), one
of its biggest subsidiaries, from, for so long as any Bonds
remaining outstanding, having indebtedness outstanding in excess of
the Debt Limit. The " Debt Limit " means (i) in the period from
(and including) 15 April 2023 to (but excluding) 31 March 2024,
GBP40,000,000; and (ii) at any time on or after 31 March 2024,
GBP15,000,000.
3. Waiver of requirement to provide financial statements for the
year ended 31 March 2022 by 31 July 2022, to provide financial
statements for the six months ended 30 September 2022 by 30
November 2022, to provide financial statements for the year ended
31 March 2023 by 31 July 2023 and to provide financial statements
for the six months ended 30 September 2023 by 30 November 2023
The Company is proposing a waiver of:
1) any Event of Default resulting from the failure to provide to the Trustee copies of:
a) its annual financial statements for the year ended 31 March
2023 (the " 2023 Audited Financial Statements ") within four months
after the end of its financial year (i.e. by 31 July 2023); and
b) its financial statements for the six months ended 30
September 2023 (the " H1 2024 Financial Statements ") within two
months after 30 September 2023 (i.e. by 30 November 2023),
as well as
2) any prior or ongoing Event of Default resulting from its
failure to complete and provide the Trustee with (a) its 2021
Audited Financial Statements by 31 July 2021, (b) its H1 2022
Financial Statements by 30 November 2021, (c) its annual financial
statements for the year ended 31 March 2022 (the " 2022 Audited
Financial Statements ") by 31 July 2022, and (d) its financial
statements for the six months ended 30 September 2022 (the " H1
2023 Financial Statements ") by 30 November 2022,
provided that copies of the 2021 Audited Financial Statements,
the 2022 Audited Financial Statements, the 2023 Audited Financial
Statements and the H1 2024 Financial Statements are furnished to
the Trustee by 30 June 2023, 30 September 2023, 31 December 2023
and 31 March 2024, respectively (each, a " Relevant Deadline
").
The Company's financial year ends on 31 March in each year. The
terms and conditions of the Bonds require the Company to deliver to
the Trustee copies of (i) its annual financial statements within
four months after the end of the financial year, i.e. by 31 July in
each year, and (ii) its interim financial statements for the six
months ended 30 September in each year within 2 months after that
date, i.e. by 30 November in each year.
The Company had previously not satisfied (and had received a
waiver from the Bondholders from satisfying) this requirement in
respect of its 2021 Audited Financial Statements and its H1 2022
Financial Statements.
The Company announced on 25 April 2022 that it has completed the
sale of STX Entertainment, which has resulted in complex financial
reporting and transition issues, leading to a delay in completing
its financial audits. The Company has worked diligently to resolve
such issues, and has engaged with its new auditors to complete and
publish the 2022 Audited Financial Statements as soon as
practicable. This may also impact on the Company's ability to
complete and provide the Trustee with the 2023 Audited Financial
Statements by the deadline imposed by the terms and conditions of
the Bonds.
The Company is therefore proposing a waiver of any Event of
Default resulting from the failure to provide copies of the 2023
Audited Financial Statements and the H1 2024 Financial Statements
by the deadlines specified above, as well as any prior or ongoing
Event of Default resulting from its failure to provide the Trustee
with the 2021 Audited Financial Statements, the H1 2022 Financial
Statements, the 2022 Audited Financial Statements and the H1 2023
Financial Statements, provided that copies of the 2021 Audited
Financial Statements, the 2022 Audited Financial Statements, the
2023 Audited Financial Statements and the H1 2024 Financial
Statements are provided to the Trustee by the Relevant Deadline.
The Company does not currently publish any other interim financial
statements.
4. Waiver of an Event of Default relating to the Company's
failure to add its Subsidiary, Eros Worldwide FZE, as a Subsidiary
Guarantor in respect of the Bonds in accordance with the
requirements of the Conditions (provided that it is added as a
Subsidiary Guarantor by no later than 30 June 2024)
The Company is also proposing a waiver of any Event of Default
under Condition 8(b) ( Breach of Other Obligations ), and any
related breach of the Trust Deed, arising as a result of its
failure to add its Subsidiary, Eros Worldwide FZE, as a Subsidiary
Guarantor in accordance with the requirements of the Trust Deed and
Condition 2(c) ( Addition of Subsidiary Guarantors ).
Condition 2(c) requires, in summary, that a Subsidiary of the
Company which becomes a borrower, or provides a guarantee or
indemnity in respect of, certain indebtedness must unconditionally
and irrevocably guarantee, on a joint and several basis, the due
payment of all sums expressed to be payable by the Company under
the Trust Deed, the Bonds and the Coupons.
The Company, together with its Subsidiaries Eros Network Limited
and Eros International USA Inc., has been a guarantor under an
overdraft facility provided by the Bank of India (the " Bank of
India Facility ") to its Subsidiary Eros International Limited
since before the Bonds were first issued. In May 2020, the
Company's Subsidiary, Eros Worldwide FZE, was added as a guarantor
in respect of the Bank of India Facility. At that point in time the
Company was very busy dealing with the merger of STX Entertainment
and inadvertently failed to comply with its obligation to add this
Subsidiary as a Subsidiary Guarantor, or to notify the Trustee of
the same, as required by Condition 2(c) ( Addition of Subsidiary
Guarantors ). The Company is now proposing to add this Subsidiary
as a Subsidiary Guarantor, pursuant to and as required by Condition
2(c) ( Addition of Subsidiary Guarantors ), by no later than 30
June 2023, and accordingly is proposing a waiver of any Event of
Default under Condition 8(b) ( Breach of Other Obligations ), and
any related breach of the Trust Deed, for having failed to do so
previously (including its failure to notify the Trustee of the
same), provided that this Subsidiary is added as a Subsidiary
Guarantor, pursuant to and as required by Condition 2(c) ( Addition
of Subsidiary Guarantors ), by no later than 30 June 2023.
5. Waiver of an Event of Default and a Potential Event of
Default in connection with a default under a Subsidiary's financing
agreement
The Company is also proposing a waiver of an Event of Default
under Condition 8(c) ( Cross-Default ), as well as any Events of
Default under Conditions 8(d) ( Enforcement Proceedings ) and 8(e)
( Security Enforced ), and any related breach of the Trust Deed, in
each case arising (or which may arise) as a result of a repayment
default in respect of the Bank of India Facility.
On 15 February 2023, Eros International Limited entered into
administration following a repayment default under the Bank of
India Facility. While this repayment default and administration has
triggered a cross-default scenario under Condition 8(c) and a
Potential Event of Default under Conditions 8(d) and 8(e), the
Company and Eros International Limited are actively working with
the relevant parties to remedy this Event of Default and to ensure
that the Potential Events of Default do not become Events of
Default. The Company will give notice to Bondholders as soon as
practicable after agreement has been reached with the relevant
parties (both to reschedule the Bank of India Facility, and to
return the control of Eros International Limited to its board of
directors). Accordingly, in order to give the Company time to
remedy these matters the Company is proposing a waiver of an Event
of Default under Condition 8(c) ( Cross-default ), as well as any
Event of Default that has arisen or may arise under Conditions 8(d)
( Enforcement Proceedings ) and 8(e) ( Security Enforced ), and any
related breach of the Trust Deed, as a result of the relevant
repayment default.
6. Waiver of breach of financial covenants
The Company is also proposing a continued waiver of the
requirement to comply with the covenants set out in Condition 3(b)
(Financial Covenant (Leverage Ratio)) and Condition 3(c) (Financial
Covenant (Fixed Charge Cover Ratio)) (together, the " Financial
Covenants ") until 31 March 2024.
Due to the continued delay in finalisation of the 2021 Audited
Financial Statements and the 2022 Audited Financial Statements as
well as the expected delay in the finalisation of the 2023 Audited
Financial Statements, as described above, the Company is currently
unable to confirm compliance with the Financial Covenants.
Furthermore, due to the impact of the COVID-19 pandemic and the
sale of STX Entertainment on the restatement of the Company's
financials and the Company's financial position, the Company
anticipates that, even if it were able to test compliance with the
Financial Covenants upon the publication of the 2022 Audited
Financial Statements or the 2023 Audited Financial Statements, it
would be in breach of the Financial Covenants when the 2022 Audited
Financial Statements or the 2023 Audited Financial Statements are
published. The Company anticipates that it may be unable to comply
with the Financial Covenants until the publication of the Company's
2024 Audited Financial Statements.
Accordingly, the Company is proposing a waiver of any breach of
the Financial Covenants (and any resultant Event of Default or
Potential Event of Default) until 31 March 2024.
7. Replacement of Trustee
In light of a change in business operations within the Trustee,
the Trustee has informed the Company of its wish to resign as
Trustee for the Bonds. The Company is currently in the process of
onboarding and appointing a replacement trustee, which is expected
to occur on or before 15 April 2023. Accordingly, the Company is
seeking the approval of Bondholders to the appointment of a trustee
corporation to replace U.S. Bank Trustees Limited as trustee for
the Bondholders. As the appointment process is ongoing as at the
date of this Repurchase and Consent Solicitation Memorandum and is
not expected to be completed until after the Meeting, the Company
is unable to confirm to the Bondholders of the identity of the
replacement trustee at this time. As such, the Company is also
seeking a waiver of any actual or potential breach of Clause 14.1
of the Trust Deed relating to Bondholders approving the appointment
of a specific new trustee. The Company will give notice to
Bondholders of the formal appointment of the replacement trustee in
accordance with the provisions of the Trust Deed.
Other Developments
Undertaking to create security
To enhance value for Bondholders, the Company is proposing, as a
separate and ancillary matter (not forming part of the Proposals)
that it will, by no later than 30 June 2023 (the " Security
Deadline "), procure the creation of security (the " Security ")
over certain intellectual property and other intangible rights (the
" Secured Assets ") described in the Repurchase and Consent
Solicitation Memorandum and held by its wholly-owned subsidiary,
Eros Worldwide FZE, for the benefit of the Trustee (acting as
security trustee) on behalf of the Bondholders. Once created, the
Security will remain in place for so long as any Bond remains
outstanding, save that the Company (or Eros Worldwide FZE) shall be
permitted to dispose of all or any part of the Secured Assets (and
release the Security accordingly) provided that at least 50% of the
net proceeds of any such disposal are used to repay the Bonds
(either in full or in part, as the case may be).
The Company is working with its advisers to make arrangements
for the creation of the Security by no later than the Security
Deadline, and will give notice to the Bondholders by RNS and by
delivery of a notice to the Clearing Systems once the Security has
been created.
General
Details of how to participate in the Repurchase and the Consent
Solicitation are set out in the Repurchase and Consent Solicitation
Memorandum. Bondholders may obtain a copy of the Repurchase and
Consent Solicitation Memorandum by contacting the Tender,
Tabulation and Information Agent, the contact details of whom are
set out below.
Notices throughout the Repurchase and Consent Solicitation will
be published in accordance with the Trust Deed and all applicable
rules and regulations as follows:
(a) a notice in Euroclear Bank SA/NV and Clearstream Banking
S.A. for communication to Direct Participants; and/or
(b) an announcement released on the RNS service of the London
Stock Exchange, and by any other means as the Company may, in its
absolute discretion, consider appropriate.
Disclaimer
The Repurchase and Consent Solicitation Memorandum contains
important information which should be read carefully before any
decision is made in respect of the Offers.
If you are in any doubt as to the action you should take, you
are recommended to seek your own financial advice, including in
respect of tax consequences, immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser authorised under the Financial Services and Markets Act
2000 as amended (if you are in the United Kingdom) or from another
appropriately authorised independent adviser (if you are not).
Before making a decision with respect to the Repurchase and/or
the Consent Solicitation, Bondholders should carefully consider all
of the information in the Repurchase and Consent Solicitation
Memorandum and, in particular, the risk factors described
therein.
No person is authorised in connection with the Repurchase or the
Consent Solicitation to give any information or to make any
representation not contained in the Repurchase and Consent
Solicitation Memorandum, and any such information or representation
must not be relied on as having been authorised by or on behalf of
the Company, the Trustee, the Tender, Tabulation and Information
Agent or the Principal Paying Agent or any of their respective
affiliates. None of the Tender, Tabulation and Information Agent,
the Trustee or the Principal Paying Agent or their respective
affiliates has separately verified the information contained
herein. Accordingly, no representation, warranty or undertaking,
express or implied, is made and no responsibility nor liability is
accepted by the Trustee, the Tender, Tabulation and Information
Agent or the Principal Paying Agent or any of their respective
affiliates as to the accuracy or completeness of the information
contained in the Repurchase and Consent Solicitation Memorandum or
any other information provided by it in connection with the
Repurchase and/or the Consent Solicitation.
The Company has retained Kroll Issuer Services Limited to serve
as Tender, Tabulation and Information Agent with respect to the
Repurchase and the Consent Solicitation. At any time, the
Tabulation Agent may trade Bonds for their own accounts or for the
accounts of customers and, accordingly, may have a long or short
position in the Bonds.
None of the Trustee, the Tender, Tabulation and Information
Agent or the Principal Paying Agent or any of their respective
directors, employees and affiliates assume any responsibility for
the accuracy or completeness of the information concerning the
Repurchase, the Consent Solicitation, the Extraordinary Resolution,
the Company or any of its affiliates or the Bonds in the Repurchase
and Consent Solicitation Memorandum or for any failure by any of
them to disclose events that may have occurred and may affect the
significance or accuracy of such information and the terms of any
amendment to the Repurchase and/or the Consent Solicitation.
None of the Company, the Trustee, the Tender, Tabulation and
Information Agent, the Principal Paying Agent or any director,
officer, employee, agent or affiliate of any such persons are
acting for any Bondholder, or will be responsible to any Bondholder
for providing any protections which would be afforded to its
clients or for providing advice in relation to the Repurchase, the
Consent Solicitation or the Extraordinary Resolution, and
accordingly none of the Company, the Trustee, the Tender,
Tabulation and Information Agent, the Principal Paying Agent or any
director, officer, employee, agent or affiliate of any such
persons, make any recommendation whether Bondholders should
participate in the Repurchase or the Consent Solicitation or
otherwise participate at any Meeting and none of the Trustee, the
Tender, Tabulation and Information Agent, the Principal Paying
Agent or any director, officer, employee, agent or affiliate of any
such persons, make any representation whatsoever regarding the
Repurchase or the Consent Solicitation.
The distribution of the Repurchase and Consent Solicitation
Memorandum in certain jurisdictions may be restricted by law.
Persons into whose possession the Repurchase and Consent
Solicitation Memorandum comes must inform themselves about and
observe any such restrictions.
Questions and requests for assistance in connection with the
Consent Solicitation may be directed to the Company:
Eros Media World PLC
First Names House
Victoria Road
Douglas IM2 4DF
Isle of Man
Attention: Investor Relations Team
Email: Investors@ErosIntl.com
Questions and requests for assistance in connection with the
delivery of Repurchase Instructions or Voting Instructions may be
directed to the Tender, Tabulation and Information Agent:
TENDER, TABULATION AND INFORMATION AGENT
Kroll Issuer Services Limited
The Shard
32 London Bridge Street
London SE1 9SG
United Kingdom
Telephone: +44 20 7704 0880
Attention: Owen Morris
Email: eros@is.kroll.com
Website: https://deals.is.kroll.com/eros
This announcement is released by Eros Media World PLC and
contains inside information for the purposes of Article 7 of the UK
Market Abuse Regulation, encompassing information relating to the
Repurchase and the Consent Solicitation described above. For the
purposes of the UK Market Abuse Regulation, this announcement is
made by the Investor Relations team at Eros Media World PLC.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCLVLFBXXLEBBF
(END) Dow Jones Newswires
March 08, 2023 07:54 ET (12:54 GMT)
Eros Media 26 (LSE:ERO1)
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