10 March 2022

Successful restructuring of the Pierre & Vacances – Center Parcs Group

Agreement with Alcentra, Fidera, Atream and the main creditors
providing a solid basis for the implementation of the Group’s new strategy
ReInvention 2025

As part of the process announced on December 20, 2021 in connection with the goal to strengthen its equity, a project which has been underway for nearly a year, the Pierre & Vacances – Center Parcs Group announces that it has entered into an agreement (the “Agreement”) on March 10, 2022 with Alcentra (a Group’s financial creditor), Fidera (also a Group’s financial creditor) and Atream (a Group’s institutional landlord) (the “Investors”), as well as with its main bank creditors, its Euro PP creditors and its main Ornane bondholders (the « SteerCo »).

Under the terms of the Agreement, the parties have undertaken to support and carry out all steps and actions reasonably necessary to implement and complete the restructuring transactions in particular at the level of Pierre & Vacances SA (the “Company”) described therein (the “Restructuring Transactions”). The Agreement also provides that, subject to limited exceptions, the signatory creditors shall not assign their receivables until September 16, 2022.

This Agreement meets the Company’s and its founder’s objectives of preserving the integrity of the Group and achieving a balanced financial structure by reducing its indebtedness and securing the necessary liquidity to enable it to deploy its strategic plan ‘ReInvention 2025’.

 As announced in the press release dated December 20, 2021, and subject to the conditions precedent detailed below, the completion of the Restructuring Transactions will mainly allow:

  • the injection of €200m of equity, to strengthen the Group’s balance sheet in view of the implementation of its strategic plan ReInvention 2025, by :

 

a. a capital increase with preferential subscription rights of approximately  €50 million, open to all existing shareholders and fully underwriten by Alcentra and Fidera ;

b. a reserved capital increase of approximately €150 million, to :

i. Alcentra and Fidera, for at least €45m and up to €75m each;

ii. Atream for €30 million;

iii. SPG (a Group’s financial creditor) for €9 million; and

iv. Non-SteerCo Ornane holders for €21 million,

Alcentra and Fidera undertaking to subscribe, in cash, on a parity basis (unless a different allocation is agreed between them) for the new shares reserved for each of the above beneficiaries (other than Alcentra and Fidera) which may not have been subscribed for by them.

  • the massive reduction of the Group’s debt, including the conversion of nearly €552 million of unsecured debt into equity, relating to :

i. the €240 million State Guaranteed Loan (prêt garanti par l’Etat) obtained  in June 2020 (the “PGE 1”), for a converted amount of €215 million (the balance, e. €25 million, being repaid by the Company on the date of completion of the Restructuring Transactions);

ii. Euro PP bonds for a converted amount of approximately €129 million;

iii. Ornane bonds for a converted amount of approximately €98 million;

iv. unsecured bank debt for a converted amount of approximately €110 million.

These conversions of debt into equity will enable the Group to divide its gross indebtedness by circa 3, and allowing it to return to a sustainable level of debt that is significantly lower than before the health crisis.

  • the implementation of a new governance structure with shareholders ready to support Management in the execution of its strategic plan ReInvention 2025; and
  • the outsourcing of the financing of the real estate business through the creation of a dedicated real estate company whose main purpose is to acquire and lease new sites to the Group.

Depending on the subscription rate of the existing shareholders to the capital increase open to them and assuming that Alcentra, Fidera, Atream and SPG only subscribe to the entire reserved capital increase, including the portion not subscribed by the non-SteerCo Ornane holders, the Investors will hold, at the end of the Restructuring Transactions, a participation in the capital of the Company[1] between :

i. 21.7% and 24.7% of the Post-Restructuring Share Capital (as defined below) for Alcentra,

ii. 20.5% and 23.5% of the Post-Restructuring Share Capital for Fidera,

iii. 7.2% of the Post-Restructuring Share Capital for Atream.

On this same basis, the existing shareholders will hold between 4.7% and 10.8% of the Company’s capital.

The completion of all these transactions, which must be effective by September 16, 2022 at the latest (except for a specific extension), remains subject to the prior satisfaction of the conditions set out in the press release of the group dated 10 March.

Following this success, Gérard Brémond declared:

“The signing of the agreement with the Alcentra, Fidera and Atream consortium ensures the necessary financial restructuring of the Group after the catastrophic health crisis. This agreement implies a change of control of the Group, but its integrity will be maintained by the consortium, which fully adheres to the ReInvention 2025 strategic plan led by Franck Gervais and the Group’s 12,000 employees. As for me, I will remain involved in the future of the Group as a strategic advisor and active contributor to the real estate business. More than ever, I am confident in the success and sustainability of the Group, according to its values”.

Franck Gervais, Group CEO, declared:

“A historic step has been taken today, symbolizing the new dynamic that I have sought to instill since my arrival at the head of the Group in January 2021, and giving concrete form to the 2025 strategy and the vision that we share with all our teams. The signing of this agreement is the result of hard work by all our employees, who I would like to thank for their courage, tenacity and confidence. Together, we will reinvent this new form of local tourism with a positive impact and win market share among the new generations. I would like to thank the representatives of the investor group composed of Alcentra, Fidera and Atream for their confidence and the opportunity they are giving us to open a new era and build the future of our group with pride. With this financial restructuring, its 4 brands and its 12,000 men and women, the Group has a solid basis to deploy the power of its ReInvention 2025 strategy. I am convinced that this Group, created by a visionary man, Gérard Brémond, will be able to write a new history to become the European leader in reinvented local tourism.”

Sycomore Corporate Finance advised S.I.T.I., majority shareholder of Pierre & Vacances – Center Parcs, S.I.T.I. R, majority shareholder of S.I.T.I., and Mr. Gérard Brémond in the financial restructuring of S.I.T.I. and Pierre & Vacances – Center Parcs.

The advising team comprised Mofdi Gassoumi, Stanley Auvray and Marion Camboulive.

The full press release of the group setting out the transaction in detail is available on http://www.groupepvcp.com/fr

[1]     On the basis of the Post-Restructuring Share Capital. For more details, see Annex 1 (dilution tables) of the press release.