PROSPECTUS
CARE BIDCO AS (A private limited liability company organized under the laws of Norway)
Listing of Bonds issued by Care Bidco AS in a NOK 700 million FRN senior secured bond issue with maturity in 2021 ISIN: NO 001 078896.1
This prospectus (the “Prospectus”) relates to, and has been prepared in connection with the listing (the “Listing”) on Oslo Børs, a stock exchange operated by Oslo Børs ASA (“Oslo Børs”), of bonds (the “Bonds”) which were issued by Care Bidco AS ("the "Company" or the "Issuer") on 24 March 2017 in a NOK 700 million senior secured bond issue with maturity in March 2021 (the “Bond Issue”). The Bonds have a floating interest rate of 3 month NIBOR + 5.50%. The Bonds are expected to be listed and tradable on Oslo Børs on or about 21 September 2017. The distribution of this Prospectus may in certain jurisdictions be restricted by law. Accordingly, this Prospectus may not be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. The Company and the Manager (as defined below) require persons in possession of this Prospectus to inform themselves about, and to observe, any such restrictions. This Prospectus and the Bonds shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo City Court as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of, or in connection with the Bonds or this Prospectus.
THIS PROSPECTUS IS A LISTING PROSPECTUS FOR BONDS ALREADY ISSUED BY CARE BIDCO AS. NO SECURITIES ARE BEING OFFERED TO ANY PERSON IN ANY JURISDICTION ON THE BASIS OF THIS PROSPECTUS.
Investing in the Company and the Bonds (including but not limited to the Bonds) involves material risks and uncertainties. See section 2 “Risk Factors” and section 4 “Cautionary Note to Investors" regarding forward- looking statements.
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Manager
The date of this Prospectus is 19 September 2017
IMPORTANT INFORMATION
Please refer to section 12 “Definitions and Glossary of Terms” for definitions of terms used throughout this Prospectus, which also apply to the preceding pages.
This Prospectus has been prepared in order to provide information about the Group and its business in relation to the Listing of the Bonds, and to comply with the Norwegian Securities Trading Act of June 29, 2007 no. 75 (the “Norwegian Securities Trading Act”) and related secondary legislation, including EC Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive) regarding information contained in prospectuses (the “Prospectus Directive”). This Prospectus has been prepared solely in the English language.
This Prospectus has been reviewed and approved by the Norwegian FSA in accordance with sections 7-7 and 7-8, cf. section 7-3 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information given in this Prospectus. The approval given by the Norwegian FSA only relates to the Company's descriptions pursuant to a pre-defined check list of requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described in or otherwise covered by this Prospectus. The Norwegian FSA approved this Prospectus at 19 September 2017.
The Company has furnished the information in this Prospectus. The Company has engaged ABG Sundal Collier ASA (the “Manager”) as Manager in connection with the Bond Issue.
Unless otherwise indicated, the information contained herein is current as of the date hereof and the information is subject to change, completion and amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, every significant new factor, material mistake or inaccuracy that is capable of affecting the assessment of the Bonds arising after the time of approval of this Prospectus and before the date of listing of the Bonds on Oslo Børs will be published and announced promptly as a supplement to this Prospectus. Neither the publication nor distribution of this Prospectus shall under any circumstances create any implication that there has been no change in the Group’s affairs since the date hereof or that the information herein is correct as of any time since its date. The distribution of this Prospectus may in certain jurisdictions be restricted by law. Accordingly, this Prospectus may not be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. The Company and the Manager require persons in possession of this Prospectus to inform themselves about, and to observe, any such restrictions.
An investment in the Bonds involves inherent risks. Potential investors should carefully consider the risk factors set out in section 2 “Risk Factors” in addition to the other information contained herein before making an investment decision. An investment in the Company or its securities is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of their entire investment. The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult with its own legal adviser, business adviser and tax adviser as to legal, business and tax advice. In the ordinary course of their respective businesses, the Manager and certain of their respective affiliates have engaged, and will continue to engage, in investment and commercial banking transactions with the Group. The Bonds are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of an investment in the Bonds for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Without limiting the manner in which the Company may choose to make any public announcements, and subject to the Company’s obligations under applicable law, announcements relating to the matters described in this Prospectus will be considered to have been made once they have been received by Oslo Børs and distributed through its information system.
The distribution of this Prospectus and the offer and sale of the Bonds in certain jurisdictions may be restricted by law. The Company and the Manager require persons in possession of this Prospectus to inform themselves about, and to observe, any such restrictions. This Prospectus does not constitute an offer of, or an invitation to subscribe or purchase any securities in any jurisdiction. Furthermore, the restrictions and limitations listed and described herein are not exhaustive, and other restrictions and limitations in relation to the Prospectus that are not known or identified by the Company and the Manager at the date of this Prospectus may apply in various jurisdictions as they relate to the Prospectus. The Company has not registered the Bonds under the U.S. Securities Act or the securities laws of other jurisdictions other than the Kingdom of Norway and the company does not expect to do so in the future. The Bonds may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S under the Securities Act), except for pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities law, or pursuant to an effective registration statement.
TABLE OF CONTENTS
1. SUMMARY ...... 4
2. RISK FACTORS ...... 13
3. RESPONSIBILITY STATEMENT ...... 19
4. CAUTIONARY NOTE TO INVESTORS ...... 20
5. THE BONDS ...... 21
6. INFORMATION ABOUT THE COMPANY AND THE UNICARE GROUP ...... 33
7. PRINCIPAL MARKETS ...... 39
8. FINANCIAL INFORMATION ...... 42
9. THE COMPANY’S BOARD AND MANAGEMENT ...... 66
10. SHARE CAPITAL AND MAJOR SHAREHOLDERS ...... 69
11. ADDITIONAL INFORMATION ...... 70
12. DEFINITIONS AND GLOSSARY OF TERMS ...... 71
APPENDICES Appendix 1 – Bond Agreement Appendix 2 – Care Bidco AS audited consolidated financial statements 2016 Appendix 3 – Unicare Holding AS audited financial statements 2015 & 2016 Appendix 4 – Unicare Fram AS audited financial statements 2015 & 2016 Appendix 5 – Unicare Friskvernklinikken AS audited financial statements 2015 & 2016 Appendix 6 – Unicare Hokksund AS audited financial statements 2015 & 2016 Appendix 7 – Unicare Jeløy AS audited financial statements 2015 & 2016 Appendix 8 – Unicare Omsorg AS audited financial statements 2015 & 2016 Appendix 9 – Unaudited Q1 financial report for the Group Appendix 10 – Unaudited Q2 financial report for the Group
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1. SUMMARY
‘Summaries are made up of disclosure requirements known as ‘Elements’. These elements are numbered in Sections A – E (A.1 – E.7).
This summary contains all the Elements required to be included in a summary for this type of securities and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of ‘not applicable’.
Section A – Introductions and warnings
A.1 Introduction This summary should be read as introduction to the prospectus. Any decision and warning to invest in the securities should be based on consideration of the prospectus as a whole by the investor. Where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities.
A.2. Use of the Not applicable. The Prospectus will not be used in subsequent resales by prospectus financial intermediaries in resales by financial intermediari es
Section B – Issuer and guarantors B.1 Legal and The legal and commercial name of the Company is Care Bidco AS. commercial name The Guarantors are as follows: all Material Group Companies (from time to time), and always including (i) Unicare Holding AS and (ii) the Company's wholly and directly owned Subsidiaries. The current Guarantors include:
· Unicare Holding AS · Unicare Fram AS · Unicare Friskvernklinikken AS · Unicare Hokksund AS · Unicare Jeløy AS · Unicare Omsorg AS
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B.2 Domicile, The Company is incorporated in Norway with registration number 916 544 669 legal form, and organised as a private limited liability company in accordance with the legislation Norwegian Private Limited Companies Act. and country of The Guarantors are all incorporated in Norway and organised as private limited incorporatio liability companies in accordance with the Norwegian Private Limited n Companies Act, and with the following registration numbers:
Unicare Holding AS 995 986 973
Unicare Fram AS 976 547 993
Unicare Friskvernklinikken AS 975 984 168
Unicare Hokksund AS 959 678 839
Unicare Jeløy AS 983 478 778
Unicare Omsorg AS 984 328 923
B.4b Known Private providers form an increasingly integral part of the total healthcare trends service offering – a trend set to continue in the years ahead. Due to asymmetric demographic growth, significantly skewed towards a larger elderly population, and increased life expectancy on the back of medical and technological development, there is an increasing demand for Unicare's services, including nursing homes, home care services, rehabilitation, health clinics, and psychology and occupational health. There is political support towards “free choice of provider”, with rehabilitation services to become part of the program from 2017. Oslo will need 1,000 new nursing home beds before 2030 and 3,400 before 2040.
B.5 Group The Company and all its Subsidiaries from time to time constitute the Group and the Guarantors are directly controlled by the Company. The Company is a subsidiary of Care Holdco AS.
Please refer to section 6 in this Prospectus for further description.
B.9 Profit Not applicable. The Company and the Guarantors have not made any profit forecast or forecasts or estimates. estimate
B.10 Qualification Not applicable. There are no qualifications in the audit reports. s in the audit report
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B.12 Selected Below follows a summary of the Group's statement of income and financial historical position. key financial There have been no material adverse changes in the Group's financial or trading information, position since the date of the last published audited financial statements, being material 31 December 2016. There have been no material adverse changes in the adverse prospects of the Company or Guarantors since the date of their last published changes in audited financial statements, being 31 December 2016. prospects and Please note that the Company was not part of the Group in 2015 and that significant Unicare Holding AS was the current parent of the Group at that time. As such, changes in the consolidated financial statements for Unicare Holding AS for 2015 represent the financial the Group's statement of income and statement of financial position for the or trading year 2015 position. Please refer to 8.3.2 below and appendix 3 to 8 for historical key financial information on the Guarantors. The Group's statement of income:
Care Bidco AS as Unicare Holding AS parent of the Group as parent of the Group
2016 2015
Figures in NOK thousand
OPERATING INCOME
Sales revenue 701 084 723 789
Other operating income 2 855 906
Net operating income 703 939 724 696
OPERATING EXPENSE
Cost of goods sold 83 484 47 551
Salaries 492 197 576 723
Depreciation and amortization 16 138 14 676
Writedowns 61 601
Other operating expenses 90 977 76 019
Total operating expenses 682 859 715 572
Operating result 21 080 9 123
FINANCIAL INCOME AND FINANCIAL EXPENSES
Financial income 231 11 899
Financial expenses 6 785 475
Net financial items -6 554 11 424
Pre-tax result 14 525 20 547
Tax expense 4 923 2 990
Net result 9 602 17 557 6
The Group's statement of financial position:
Care BidCo AS as Unicare Holding AS parent of the Group as parent of the Group
2016 2015
Figures in NOK thousand
Assets
FIXED ASSETS
Intangible assets
Goodwill 557 984 47 879
Intangible asset 264 202 5 884
Deferred tax assets 1 650
Total intangible assets 822 187 55 414
Fixed assets
Real property
Movables, inventory, equipment 28 716 8 285
Total fixed assets 28 716 8 285
Financial fixed assets
Investment in shares and units 0 30 494
Pension 1 446 688
Other receivables 502 224
Total financial fixed assets 1 948 31 407
Total fixed assets 852 851 95 107
CURRENT ASSETS
Receivables
Accounts receivables 48 377 30 138
Other receivables 27 742 10 587
Total receivables 76 119 40 726
Cash and cash equivalents 102 462 68 653
Total current assets 178 581 109 379
Total assets 1 031 433 204 486
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Equity and liabilities
EQUITY
Paid in capital
Share capital 566 405
Share premium fund
Total paid in capital 566 405
Other equity 543 666 34 167
LIABILITIES
Provisions
Pension liabilities 33 290 5 003
Deferred tax 14 211 0
Total provisions 47 502 5 003
Other long term debt
Debt to credit institutions 88 047 43 471
Shareholder loan
Total equity
Other long term debt 629 0
Total other long term debt 88 677 43 471
Current liabilities
Accounts payable 22 061 11 875
Debt credit institutions
Tax payable 7 537 2 110
Public duties payable 42 789 36 550
Short term debt to shareholders
Other current liabilities 278 632 70 900
Total current liabilities 351 021 121 437
Total liabilities 487 200 169 913
TOTAL EQUITY AND LIABILITIES 1 031 433 204 486
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B.13 Recent Unicare Holding AS was acquired by G Square in May 2016, resulting in a new events company structure where Care Bidco AS is the owner of 100% of the shares, and Care Holdco AS is the ultimate parent. In January and February 2017 the Company has repaid NOK 1.875m in bank debt, and the consolidated cash balance is NOK 100m as of 2 March 2017. As a result of the acquisition by G Square, the consolidated equity was NOK 531m at the end of 2016, corresponding to an equity ratio of ~50% post the bond issue.
B.14 Group and For information on the Group, please refer to Element B.5 and section 6 in this dependence Prospectus. on other entities The Group is inter-related with regard to both financial and operational matters and the Group companies are as such dependent on each other. As all operations are carried out in, and all fixed assets and employees are held by, the Company's subsidiaries, the Company as a holding company is dependent on other entities in the Group.
B.15 Principal Unicare is a provider of healthcare services, with 36 locations/units in Norway activities and 10 units in Sweden, and around 2,800 employees. Its principal activities include nursing homes, home care services, rehabilitation, health clinics, and psychology and occupational health, providing related revenues in excess of NOK 1,300 million. The Group has a substantial portfolio of continuous and long term contracts with solid counterparties, including the public sector (regional health authorities (RHAs), the Norwegian Labour and Welfare Administration (NAV) and municipalities) and large corporates.
B.16 Ownership The Company is indirectly controlled by the general partner of G Square Capital and control II L.P, which in turn controls the sole shareholder of the Company, Care Holdco AS.
B.17 Credit Not applicable. Neither the Company nor the Guarantors have ordered any ratings credit ratings.
B.18 The nature The Guarantees are joint and several unconditional and irrevocable Norwegian and scope of law Guarantees from the Guarantors. the guarantee
Section C - Securities C.1 Type and Senior secured Bonds with ISIN NO 001 078896.1 class of security
C.2 Currency of NOK the securities issue
C.5 Restrictions The Bonds are freely tradable. Bondholders may however be subject to purchase on the free or transfer restrictions under local laws to which a Bondholder may be subject transferabilit (due e.g. to its nationality, its residency, its registered address, its place(s) for y of the doing business). Pursuant to the Bond Agreement, each Bondholder must securities ensure compliance with applicable local laws and regulations at its own cost and expense.
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C.8 Rights The Bonds constitute senior debt of the Company, secured on a first priority attached to basis over certain of the assets of the Company and the Guarantors, and the Bonds otherwise rank at least pari passu with the claims of its other creditors, except for obligations which are mandatorily preferred by law.
C.9 Terms of the Please see Element C.8 for rights attached to the Bonds Bonds Coupon rate: 3 month NIBOR + 5.50% per annum.
First Interest Payment Date: 24 June 2017 (3 months after the Settlement Date).
Final Maturity Date: 24 March 2021 (4 years after the Settlement Date).
The Bonds shall be repaid in full on the Final Maturity Date at a price of 100.00% of the Nominal Amount (par value).
Yield: Investors wishing to invest in the Bonds after the issue date must pay the market price for the Bonds in the secondary market at the time of purchase. Depending on the development in the bond market in general and the development of Unicare, the price of the Bonds may have increased (above par) or decreased (below par). As the Bonds have a floating reference rate, it is the market's expectations of risk premium, i.e. margin that affects the price. If the price has increased, the yield for the purchaser in the secondary market, given that the reference rate does not change, will be lower than the interest rate of the Bonds and vice versa. At par and an assumption that the reference rate is 0.79% from the issue date to maturity date, the yield will be 6.29%.
C.10 Derivative Please see Element C.9 for the terms of the Bonds. component The Bonds have a derivative component in the interest payment linked to the Norwegian Interbank Offered Rate (NIBOR).
C.11 Admission The Company has applied for listing of Bonds on Oslo Børs, and admission to to trading trading is expected to be on or about 21 September 2017 with ticker code "CARE01".
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Section D – Risks D.2 Key Market risk information Customer risk on the key Risks related to competition risks that are Unsatisfactory economic management specific to Political risks the issuer Lack of operating and financial history Insurance risk Equipment risk Growth risk Compliance with laws, regulations and industry standards Ability to retain and attract members of management and key personnel The group is exposed to liability by virtue of its operations Labour issues Health and safety risks – potential claims and penalties Litigation Risk of antitrust and competition regulation Estimation risk Acquisition strategy Limited ownership period Leverage risk Leasing obligations Interest rate risk Taxation risks Liquidity risk and need for additional funding Credit risk D.3 Key Cash requirement to meet debt obligations and sustain operations information Debt service and upstream capacity on the key Restrictive covenants may lead to inability to finance operations, capital risks that are need and to pursue business opportunities specific to Limited ability to incur additional indebtedness the The bondholders may not be able to act if the financial condition of the securities Company materially deteriorates (incurrence covenants) The bonds are callable Defaults or insolvency o subsidiaries Security coverage Upon a change of control, the company's ability to redeem the bonds with cash may be limited Value of the security assets Restrictions on transfers, failure to perfect security and priority Difficulties in enforcing the security Volatility in the price of the bonds and illiquidity in the marked General risk regarding interest bearing securities Price volatility of publicly traded securities Risks related to the market Enforceability of civil liabilities
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Section E – Offer E.2b Reasons for The Initial Loan Amount (net of fees and legal cost of the Manager and the the offer and Bond Trustee and any other cost and expenses incurred in connection with the use of Bond Issue) shall exclusively be employed for (i) repayment of Existing Debt of proceeds approximately NOK 237,400,000, and (ii) general corporate purposes, including acquisitions.
The Company shall cover all expenses in connection with the Bond Issue such as preparation of the Bond Agreement, review and approval of the Prospectus from the FSA, listing of the Bonds on Oslo Børs and registration and administration of the loan in the VPS in the accordance with the agreement between the Company and the VPS. The fees payable for listing on Oslo Børs amount to approximately NOK 50,000 and the fees payable for review and approval from the FSA amount to NOK 76,000. The total costs incurred by the Company in connection with the issuance and listing of the Bonds are expected to amount to approximately MNOK 11.16, of which services provided by the Manager amount to approximately MNOK 9.14, services provided by the Bond Trustee amount to approximately NOK 450,000, services provided by Ernst & Young AS amount to approximately NOK 700,000 and services provided by Advokatfirmaet Schjødt AS amount to approximately NOK 750,000.
E.3 Terms and Not applicable. The Prospectus relates to the listing of already issued Bonds. conditions of the offer
E.4 Material The Manager or their affiliates have provided from time to time, and will interests provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager, their employees and any affiliate may currently own existing Shares and/or bonds in the Company. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager received a commission in connection with the issue of the Bonds. E.7 Estimated Not applicable. The Company will not charge any expenses to the investors. expenses charged to the investor by the issuer or the offeror
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2. RISK FACTORS
Prior to any decision to invest in the Company’s securities, potential investors should carefully read and assess the following specific risks and the other information contained in this Prospectus. If these risks materialize, individually or together with other circumstances, they may substantially impair the business of the Group and have material adverse effects on the Group’s business prospects, financial condition or results of operations and the price of the Company’s securities may decline, causing investors to lose all or part of their invested capital. As the assets of the Company are held by various subsidiaries, the risks associated with the Group will also be relevant for the Company. The order in which the individual risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of the severity or significance of individual risks. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment.
2.1 Risks relating to the Group and the industry in which it operates
2.1.1 Market risks
The Group’s business is exposed to economic cycles. Changes in economic conditions in the markets in which the Group operates can affect the demand for its products and services and there can be no guarantee that sufficient demand for the Group's products and services can be created or maintained. 2.1.2 Customer risk
The Group is generally depending on single orders under frame agreements with key customers for the sale of its products and services. This creates an uncertainty with respect to future revenue. As majority of the Group's revenue derives from contracts which are subject to public tenders, future revenues of the Group is to a high degree dependent upon the Group's future ability to successfully tender contracts with key customers. 2.1.3 Risks related to competition
The industry in which the Group operates is competitive. Although the Group considers itself well positioned in the Norwegian and Swedish markets, no assurance can be given with regard to future competition. Competitive pressures or other factors may result in significant price competition, particularly during industry downturns, which could materially adversely affect the Group's business, results of operations and financial condition. 2.1.4 Unsatisfactory economic management
Any lack of satisfactory economic management of the Group's liquidity, profitability and cash flow may result in failure to meet payments on time and ultimately may result in bankruptcy.
2.1.5 Political risks
As a large majority of Unicare's counterparties are public institutions, Unicare is exposed to political shifts and changes in the political climate could materially adversely affect the financial condition, results of operations and cash flows of the Group both in Norway and in Sweden (and other potential countries in which Unicare may invest going forward). As an example; while the current Municipal Council in Oslo has stated not to renew any of the nursing home contracts with commercial operators that expire under their governing period in 2019, the opposition are likely to announce new tenders for commercial operations if they win the majority. The next parliamentary election in Norway is in 2017 and the next municipal election in Norway is in 2019, both during the period of the Bonds. The current national government of Norway is in favour of private provision of health care services, but this can change after the parliamentary election. There is a risk that contracted operations will be brought back into public management after expiry. 2.1.6 Lack of operating and financial history
The Company is a recently formed entity and has limited operating history or financial history upon which prospective investors can evaluate its likely performance, increasing the uncertainty of an investment in the Company. Unicare’s diverse entities have however been operating as one of Norway’s largest providers of private healthcare since 2008.
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2.1.7 Insurance risk
The Group's insurance may not necessarily cover all potential liabilities of the Group, and there is a risk that the Group will suffer substantial losses which will not be covered by any insurance policy, for example if the Group were to be liable for wrongful treatment/diagnosis or other lawsuits. Any material risks in respect of which there is not sufficient insurance coverage may result in a material adverse effect on the business, financial condition, operating results and/or cash flows of the Group. 2.1.8 Equipment risk
The Group’s equipment may be damaged or in need for replacement, which could be costly and affect the Company's profitability, and which will not necessarily be covered by insurance. 2.1.9 Growth risk
The Group may be required to make substantial capital expenditure for expansion of its operations in the future. Such capital expenditures could be covered by revenues, new equity or by obtaining new debt. If the Group’s revenues are not sufficient to cover capital expenditures for future expansion plans, if the Company is unable to attract investors to increase the Group’s equity, or if new debt arrangements are not accessible, or only on unattractive commercial terms, the Group will experience a limited ability to expand its business. 2.1.10 Compliance with laws, regulations and industry standards
Governmental laws and regulations could affect operations, increase operating costs and restrict or make it more challenging for the Group to conduct its business and/or deliver its services. Given the nature of Unicare's business and counterparties, any breach (or alleged breach) of laws and regulations could materially adversely affect the Group's business, financial condition, results of operation and prospects.
2.1.11 Ability to retain and attract members of management and key personnel
The Group's business depends on its ability to attract and retain skilled professionals with appropriate experience, technical expertise, training and certificates. The loss of key personnel may have an adverse impact on the Group's operating results and financial condition.
2.1.12 The group is exposed to liability by virtue of its operations
The Group is exposed to liability for any incorrect medical treatment, insufficient security for both employees and end-customers on different treatment centers, lack of routines, injuries, death and other shortcomings in the performance provided by it, its suppliers and/or subcontractors.
2.1.13 Labour issues
Labour unrest could prevent or hinder the Group's services from being carried out normally and, if not resolved in a timely and cost effective manner, could have a material adverse effect on its business, results of operations, cash flows and financial condition.
2.1.14 Health and safety risks – potential claims and penalties
Potential claims and penalties related to health and safety risks could have a material adverse effect on the Group's business, operations and financial conditions.
2.1.15 Litigation
The Group may from time to time be involved in claims and litigation and the Company cannot predict the outcome or consequence of any claim or other litigation matter.
2.1.16 Risk of antitrust and competition regulation
The market in which the Group operates is characterized by few and large players and applicable antitrust and competition regulations may prevent the Group from making future acquisitions and from consolidating with other companies operating within the same market. 14
2.1.17 Estimation risk
The Group may fail to effectively estimate risks, costs or timing when bidding on contracts and to manage such contracts efficiently which could have a material adverse impact on the profitability of the Group.
2.1.18 Reputation risk
The Group or any of the Group’s subsidiaries may become subject to inspections and negative publicity relating to private operators in each of the Group’s business segments which may have a material adverse effect on the Group’s operations, results and financial conditions. Similarly, the Group’s reputation may also be negatively affected if there is a quality breach in the operations in one of the Group’s subsidiaries.
2.1.19 Acquisition strategy
The Group may not be successful in implementing its acquisition strategy. Furthermore, when acquiring other existing business, the Group may not discover all potential liabilities within such business through its customary due diligence, in which case the Group may be responsible for liabilities related to actions/omissions which took place prior to the Group acquired such business.
2.1.20 Limited ownership period
The Company has only owned its business for a limited period of time, and consequently does not have the same level of knowledge about its business and the risks related thereto as would an owner who had held the business for a longer period of time.
2.2 Financial risks
2.2.1 Leverage risk
The Company is highly leveraged following completion of the Bond Issue and will be required to dedicate a substantial portion of its free cash flow from operations to services interest and principal making it less able to fund, inter alia, its operations, capital expenditures, R&D and working capital requirements. 2.2.2 Leasing obligations
The Group has entered into several long term real estate leasing contracts which represent a substantial off balance sheet liability. 2.2.3 Interest rate risk
The Bonds will have a floating interest rate. An increase in the reference rate may have a material adverse effect on the Group’s financial condition, results of operation and liquidity. 2.2.4 Taxation risks
The Group is exposed to risk regarding the correct application of tax regulations as well as possible future changes in the tax legislation of, including potential different application of the tax rules by the authority compared to what the Company considers to be correct. An increase in the consolidated tax payable of the Group may materially adversely affect the Company's ability to pay all or part of the interest or principal on the Bonds. 2.2.5 Liquidity risk and need for additional funding
Although the Company's access to liquidity is currently satisfactory, there is always a risk that this may change in the future. Failure to maintain liquidity could have an impact on the Company's financial performance through higher interest rates or possibly even forced liquidation. The Company cannot guarantee that it will be able to obtain the necessary financing required to meet maturing debt liabilities and fund current operations, and even if such financing is obtained, no assurance can be given that such financing will be on terms acceptable to the Company. A failure to obtain required financing in time to meet the Company's maturing debt liabilities will materially adversely affect the Company's business, operations and financial condition. 2.2.6 Credit risk
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Set aside that part of the Company's income which is based on advance payment, there is always a risk that counterparties and customers will not have the financial ability to meet their obligations, and there can be no assurances that losses will not occur in the future and impact the Company's earnings and cash balance.
2.3 Risk factors relating to the Bonds
2.3.1 Cash requirement to meet debt obligations and sustain operations
If the Group does not have sufficient cash flows to pay its financial indebtedness and to fund its other liquidity needs the Company may become dependent on obtaining new financing. No assurance can be given that the Company will be able to obtain such financing on terms acceptable to the Company. 2.3.2 Debt service and upstream capacity
Applicable law may limit the amounts that some of the members of the Group will be permitted to pay as dividends or distributions on their equity interests, and limitations on the ability to transfer cash among entities within the Group may mean that even though the entities in aggregate may have sufficient resources to meet their obligations, the Company may not be permitted to make the necessary transfers within the Group. 2.3.3 Restrictive covenants may lead to inability to finance operations, capital needs and to pursue business opportunities
Restrictive covenants could have a material adverse effect on the Company's and the other members of the Group's ability to carry on its business and operations, may prevent the Group from taking actions that it believes would be in its best interest, and may make it difficult for the Group to execute its business strategy successfully and, in turn, the Company's ability to pay all or part of the interest or principal on the Bonds. 2.3.4 Ability to incur additional indebtedness
Under certain circumstances the amount of additional financial indebtedness that could be incurred by the Group could be substantial and any debt that is incurred by the Company's subsidiaries could be structurally senior to the Bonds. 2.3.5 The bondholders may not be able to act if the financial condition of the Company materially deteriorates (incurrence covenants)
Since the Company will only be required to satisfy certain financial ratios upon the occurrence of certain types of financial indebtedness there is a significant risk that the Bondholders will be unable to accelerate the maturity date of the Bonds, or take other actions against the Company to preserve their investments, even if the financial condition of the Company and the Group materially deteriorates. 2.3.6 The bonds are callable
The optional redemption by the Company at a price equal to the par value of the Bonds plus an applicable call premium is likely to serve as a "cap" on the market value of the Bonds, as the market value of the Bonds generally will not rise substantially above the price at which they can be redeemed by the Company at any time. Furthermore, in the event of such redemption, the Bondholders will be prepaid pro rata according to the Norwegian Central Securities Depository (Nw. Verdipapirsentralen) internal routines. 2.3.7 Defaults or insolvency of subsidiaries
Defaults by, or the insolvency of, certain subsidiaries of the Group could result in the obligation of other members of the Group to make payments under inter alia financial or performance guarantees in respect of such subsidiaries’ obligations, or cause cross-defaults on certain borrowings of the Group. There can be no assurance that the Group and its assets would be protected from any actions by the creditors of any subsidiary of the Group, whether under bankruptcy law, by contract or otherwise.
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2.3.8 Security coverage
Although the Bonds are secured, there can be no assurance that the security will be sufficient to cover the Company's payment obligations under the Bonds in case of a default. Furthermore, the Bond Agreement allows the Company to raise additional debt financing through tap issues that will be secured by the existing security (without any obligation to create additional guarantees or security), i.e. the Company may accrue more debt by way of issuing additional bonds under tap issues under the same security as for the Bonds. Hence the debt/secured assets ratio may increase significantly and the security may not be sufficient to cover the Company's payment obligations under the Bonds in case of a default. 2.3.9 Change of control – the company's ability to redeem the bonds with cash may be limited
Upon the occurrence of a Change of Control Event (as defined in the Bond Agreement), each individual Bondholder shall have a right of pre-payment of the Bonds plus all accrued and unpaid interest to the date of redemption together with a prepayment premium established in the Bond Agreement. However, it is possible that the Company will not have sufficient funds at the time of the Change of Control Event to make the required redemption of Bonds. The Company's failure to redeem tendered Bonds would constitute an event of default under the Bond Agreement. 2.3.10 Modification of the bonds or waivers or authorizations of breaches and substitution
The Bond Agreement will contain provisions for calling meetings of Bondholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Bondholders, including Bondholders who did not attend and vote at the relevant meeting and Bondholders who voted in a manner contrary to the majority.
Nordic Trustee AS, as trustee on behalf of the Bondholders may, without the consent of the Bondholders, agree to certain modifications of the Bond Agreement and other Finance Documents (as defined in the Bond Agreement) which, in the opinion of the trustee, are proper to make. Such modifications which will be binding upon the Bondholders will and further described in the Bond Agreement. 2.3.11 Limitations on guarantees and security interests - financial assistance restrictions
The Security may and guarantees provided under the Bonds will be subject to the mandatory provisions of applicable law which limit the legal capacity or ability to provide security, including, but not limited to the mandatory provisions of section 8-7 and 8-10 of the Norwegian Limited Companies Act (Nw. aksjeloven) which regulate unlawful financial assistance in connection with acquisition of shares in a company or its parent company and other prohibited loans, guarantees and liabilities as well as the provision of security. As a consequence of these legal restrictions, the security granted will only be valid to the extent the security falls within one or more of the exemptions of the provisions applicable of the Norwegian Limited Companies Act section 8-7 and the value of the guarantees and security for the Bonds may be significantly reduced. Guarantors incorporated in jurisdictions, other than Norway, may be subject to legal limitations and restrictions limiting such a guarantor's ability to provide upstream-and cross stream collateral and guarantees. At this point in time, no investigations have been made with regards to such potential restrictions in jurisdictions other than Norway. No assurance can be given that Guarantors incorporated in jurisdictions other than Norway may guarantee and/or secure the Bonds. 2.3.12 Value of the security assets
If the value of the Security (or the underlying secured assets) is less than the value of the claims of the Bondholders together with the claims of the other secured creditors, those claims may not be satisfied in full and no assurance can be given with respect to the amount that could be received upon a sale of any Security. 2.3.13 Restrictions on transfers, failure to perfect security and priority
The Security is subject to restrictions on the transferability and/or assignability of an asset that will apply mutatis mutandis with respect to the creation of a security interest over that asset. Furthermore, certain assets can only be properly perfected and its priority retained, through certain actions required to be undertaken by the secured party or the grantor of the security. Finally, the ranking of pledges could be determined by the date on which they were perfected. 17
2.3.14 Difficulties in enforcing the security
The Security might be subject to defects, encumbrances, liens and other imperfections permitted under the Bonds which could adversely affect the value of the Security and the ability to enforce or realize the Security. Upon the occurrence of an event of default under the Bond Agreement, any enforcement proceedings could be subject to lengthy delays resulting in, inter alia, increased custodial costs, adverse tax consequences. The costs of enforcement in any foreign jurisdictions, particularly if proceedings are on-going simultaneously in different jurisdictions, can be high. Even if the Bondholders are successful in bringing an action in these jurisdictions, local laws may prevent or restrict the Bondholders from enforcing a judgment against the Group’s assets or the assets of its officers. 2.3.15 Volatility in the price of the bonds and illiquidity in the market
There is currently no trading market for the Bonds and no assurance can be given as to (i) the liquidity of any such market that may develop (ii) the Bondholders' ability to sell the Bonds or (iii) the price at which Bondholders would be able to sell the Bonds. 2.3.16 Legal limitation on the security agent's ability to act
The Bondholders will be restricted from taking actions against the Company and/or Guarantors, other than through Nordic Trustee AS serving as their trustee/agent within specified legal capacities. The ability for the trustee to act on behalf of the Bondholders will differ among various jurisdictions and the concept of an agent/trustee may not be recognized in the jurisdiction in which the relevant Security Interests and/or claims need to be enforced. 2.3.17 Resale restrictions
The Bonds are being offered and sold pursuant to an exemption from registration under United States and applicable state security laws. Therefore, the Bonds may be transferred or resold in the United States only in a transaction registered under or exempt from the registration requirements of the securities act and applicable state securities law, and the seller maybe required to bear the risk of the investment for an indefinite period of time. Furthermore, there cannot be any assurance that an active market will develop for the bonds, which could imply that an investor may not be able to sell its Bonds at all or sell the Bonds at an acceptable price. 2.3.18 General risk regarding interest bearing securities
All investments in interest bearing securities, such as the Bonds has risks associated with it, such as risks related to the general volatility in the market for such securities, varying liquidity in a single bond issue as well as company specific risk factors.
2.3.19 Price volatility of publicly traded securities
The price of a single bond will fluctuate in accordance with the interest rate and credit markets in general, the market view of the credit risk of that particular bond issue, and the liquidity of these bonds in the market. The interest rates can, and will, experience substantial fluctuations caused by a number of factors based on the development in the international economy, and are dependent on Unicare's operations.
2.3.20 Risks related to the market There can be no assurance that there will be a liquid market for the Bonds. Therefore, investors may not be able to sell their bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. Illiquidity may have severely adverse effect on the market value of the Bonds. 2.3.21 Enforceability of Civil Liabilities
The Company is a limited liability company organized under the laws of Norway and the directors and executives of the Company reside in Norway. As a result, it may not be possible for investors in other jurisdictions to effect service of process in other jurisdictions upon such persons or the Company or to enforce judgments on such persons or the Company in other jurisdictions.
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3. RESPONSIBILITY STATEMENT
The Company, with registered address Pilestredet 56, 0167, Oslo, Norway is responsible for this Prospectus. The Company declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is to the best of the Company's knowledge in accordance with the facts and contains no omissions likely to affect its import.
Oslo, 19 September 2017
Care Bidco AS
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4. CAUTIONARY NOTE TO INVESTORS
4.1 Forward-looking statements
This Prospectus includes forward-looking statements, including, without limitation, projections and expectations regarding the Group’s future financial position, business strategy, plans and objectives. When used in this document, the words “projects”, “forecasts”, “estimates”, “expects”, “anticipates”, “believes”, “plans”, “intends”, “may”, “might”, “will”, “would”, “can”, “could”, “should”, “seek to” or, in each case, their negative, or other variations or similar expressions, as they relate to the Company, its subsidiaries or its management, are intended to identify forward-looking statements. Such statements are included in section 7 ("Principal Markets") of this Prospectus. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company and its subsidiaries, or, as the case may be, the industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company and its subsidiaries will operate. Factors that could cause the Group’s actual results, performance or achievements to materially differ from those in the forward-looking statements include but are not limited to:
the general and competitive nature of the markets in which the Group operates; global and regional economic conditions; government regulations; changes in political events; force majeure events; and exchange rate fluctuations.
Prospective investors in the Bonds are cautioned that forward-looking statements are not guarantees of future performance and that the Group’s actual financial position, operating results and liquidity, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this Prospectus. The Group cannot guarantee that the intentions, beliefs or current expectations upon which its forward-looking statements are based will occur. These forward looking statements are subject to risks, uncertainties and assumptions, including those discussed elsewhere in this Prospectus.
The Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Group or to persons acting on the Group’s behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Prospectus.
4.2 Manager's liability disclaimer
The Manager make no representation or warranty, express or implied, as to the accuracy or completeness of the information in this Prospectus, and nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation by the Manager. Neither the Company nor the Manager has authorised any other person to provide investors with any other information related to the Listing and neither the Company nor the Manager will assume any responsibility for any information other persons may provide.
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5. THE BONDS 5.1 The terms and details of the Bonds
Below is an overview of the key terms and details of the Bonds. The full bond agreement for the Bonds (the "Bond Agreement") is included in Appendix 1 to this Prospectus.
ISIN NO 001 078896.1
Issuer The Company
Guarantors All appointed Material Group Companies (from time to time), and always including the following Group Companies: (i) Unicare Holding AS; and (ii) the Company's wholly and directly owned Subsidiaries. The current Guarantors are:
· Unicare Holding AS · Unicare Fram AS · Unicare Friskvernklinikken AS · Unicare Hokksund AS · Unicare Jeløy AS · Unicare Omsorg AS
Security Type Bond issue with floating rate
Bond Trustee The bondholders are represented by Nordic Trustee AS (formerly known as Nordic Trustee ASA), P.O. Box 1470 Vika, N-0116 Oslo, Norway. For further information on the Bond Trustee's rights and power to represent the Bondholders, please refer to Clause 16 in the Bond Agreement. Manager ABG Sundal Collier ASA, Munkedamsveien 45 E, N-0250 Oslo, Norway.
Currency NOK
Maximum Loan NOK 700,000,000. Amount
Initial Loan NOK 350,000,000. Amount
Purpose of the The Initial Loan Amount (net of fees and legal cost of the Manager and the Bond Bond Issue Trustee and any other cost and expenses incurred in connection with the Bond Issue) shall exclusively be employed for (i) repayment of Existing Debt of approximately NOK 237,400,000, and (ii) general corporate purposes, including acquisitions.
Reference rate 3 month NIBOR.
NIBOR means the interest rate which (a) is published on Oslo Børs NIBOR Page (or through another system or on another website replacing or (as the case may be) agreed, between Norske Finansielle Referanser (NoRe) (or any other Person which takes over the administration of NIBOR) and the NIBOR calculation agent), to replace the said system or website respectively) approximately 12.00 noon (on days on which the Norwegian money market has shorter opening hours (New Year's Eve and the Wednesday before Maundy Thursday), the data published by the banks at 10 a.m. shall be used), or, if such publication does not exist, (b) at that time corresponds to (i) the average of the quoted lending rates of Norwegian commercial banks on the interbank market in Oslo or, if only one or no such quotes are provided, (ii) the assessment of the Bond Trustee of the interest rate, which in the Bond Trustee's determination is equal to what is offered by Norwegian commercial banks, for the applicable period in the Oslo interbank market. If any such rate is below zero, NIBOR will be deemed to be zero.
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Information on the historical and further development of the reference rate may be found at the NIBOR calculation agent's (Oslo Børs) website: http://www.oslobors.no/markedsaktivitet/niborOverview?newt__ticker=NIBOR3M
Margin 5.50%
Coupon Rate Floating rate of 3 month NIBOR + 5.50% per annum. The interest rate with the 3 month NIBOR as of 01 September 2017 is 6.29%. Yield Investors wishing to invest in the Bonds after the issue date must pay the market price for the Bonds in the secondary market at the time of purchase. Depending on the development in the bond market in general and the development of Unicare, the price of the Bonds may have increased (above par) or decreased (below par). As the Bonds have a floating reference rate, it is the market's expectations of risk premium, i.e. margin that affects the price. If the price has increased, the yield for the purchaser in the secondary market, given that the reference rate does not change, will be lower than the interest rate of the Bonds and vice versa. At par and an assumption that the reference rate is 0.79% from the Issue Date to Final Maturity Date, the yield will be 6.29%. Issue Date 24 March 2017.
Final Maturity 24 March 2021. Date
Amortisation The Bonds shall be repaid in full on the Final Maturity Date at a price of 100.00% of the Nominal Amount (par value).
First Interest 24 June 2017. Payment Date
Last Interest Final Maturity Date. Payment Date
Interest Interest on the Bonds will commence to accrue on the Issue Date and shall fall due Payments on each Interest Payment Date for the corresponding preceding Interest Period and, with respect to accrued interest on the principal amount then due and payable, on each Repayment Date, and on the Final Maturity Date. Day-count fraction for the coupon is actual/360, business day convention is "modified following" and Business Day as defined in section 12 herein.
Calculation of Please refer to section 9.1 of the Bond Agreement attached as Appendix 1 for details interest on calculation of interest payments. payments
Interest Period Subject to adjustment in accordance with the Business Day Convention, the period between 24 June, 24 September, 24 December and 24 March each year, provided however that an Interest Period shall not extend beyond the Final Maturity Date.
Interest The last day of each Interest Period, i.e. 24 June, 24 September, 24 December and Payment Date 24 March – the first Interest Payment Date being 24 June 2017 and the last Interest Payment Date being the Maturity Date.
Issue Price 100% of par value.
Nominal The Bonds have a nominal (par) value of NOK 500,000. Amount:
Status of the The Bonds constitute direct, general, unconditional, unsubordinated and secured Bonds obligations of the Issuer and will rank at least pari passu between themselves and all other senior creditors (except in respect of claims mandatorily preferred by
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law).
Call Options The Company may redeem the Bonds (in whole or in part) at any time from and (American) including:
(i) the Issue Date to, but not including, the First Call Date at a price equal to the Make Whole Amount;
(ii) the First Call Date to, but not including, the Interest Payment Date falling 42 months after the Settlement Date at a price equal to 102% of the Nominal Amount;
(iii) the Interest Payment Date falling 42 months after the Issue Date to, but not including the Final Maturity Date at a price equal to 101% of the Nominal Amount; and
(iv) if refinanced with a bond issue, the date falling 2 months prior to the Final Maturity Date to, but not including the Final Maturity Date at a price equal to 100% of the Nominal Amount.
In addition, the Issuer shall pay accrued and unpaid interest on redeemed Bonds.
Written notice must be given at least ten (10) Business Days prior to the proposed repayment date for the call (the “Call Option Repayment Date”).
For further information on Call Options, please refer to Clause 10.2 in the Bond Agreement.
Make-Whole Means an amount equal to the sum of: (i) the present value on the Call Option Amount Repayment Date of 102% of the Nominal Amount as if such payment had taken place on the First Call Date; and (ii) the present value on the Call Option Repayment Date of the remaining Interest Payments (less any accrued and unpaid interest as of the Call Option Repayment Date) to and including the First Call Date, where the present value shall be calculated by using a discount rate of 50 basis points above the comparable Government Bond Rate (i.e. comparable to the remaining duration until the First Call Date using linear interpolation).
Make-Whole Means the first Business Day after the day the Issuer has sent notice for exercising Calculation Date of the Call Option.
Security All amounts outstanding to the Bond Trustee (on behalf of the Bondholders) under the Finance Documents, including but not limited to principal, interest, fees and expenses, is (subject to any mandatory limitations under applicable law) secured by the following security:
(i) first priority charges over the Issuer’s bank accounts (to be unblocked except upon the occurrence of an Event of Default which is continuing and following the Bond Trustee's written notice to the relevant account bank); (ii) first priority pledge over all shares issued in the Issuer and all of the Guarantors; (iii) to the extent legally and practically possible, joint and several unconditional and irrevocable Norwegian law guarantees (Nw. "selvskyldnerkausjon"), or the corresponding guarantee under other applicable law to the extent made by a Guarantor which is not a Norwegian legal entity, from each of the Guarantors, which shall constitute senior obligations of the Guarantors (the "Guarantees"); (iv) first priority floating charges in operational assets (Nw: Driftstilbehørspant) of each Guarantor incorporated in Norway and the Issuer;
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(v) first priority floating charges in the account receivables (Nw: Factoringpant) of each Guarantor incorporated in Norway and the Issuer; and (vi) first priority pledge in any Intercompany Loans from the Issuer to the Guarantors (if any in existence). The Issuer shall for as long as any amount remain outstanding under the Bonds ensure that all shares issued by its directly owned Subsidiaries are pledged on first priority in favour of the of the Bond Trustee (on behalf of the Bondholders).
For further information on the Guarantees and the Security and the most important agreement regarding the Guarantees and the Security, please refer to clause 2.5 in the Bond Agreement and, with respect to the Guarantees, to section 5.2 in this Prospectus.
Financial Minimum Cash at all times to be no less than NOK 35,000,000 (on a consolidated Covenants basis of the Group).
The minimum Cash Financial Covenant to be tested at the last day of each quarter and be confirmed upon delivery of each compliance certificate with reference to that preceding quarter.
General (a) Distributions: The Issuer shall not, and shall ensure that no other Group Undertakings Company will, make any Distribution other than any Permitted Distribution.
(b) Mergers: The Issuer shall not, and shall ensure that no other Group Company shall, carry out any merger or other business combination or corporate reorganisation involving a consolidation of the assets and obligations of the Issuer or any other Group Company with any other companies or entities, if such transaction would have a Material Adverse Effect.
(c) De-mergers: The Issuer shall not, and shall make sure that no Material Group Companies shall, carry out any de-merger or other corporate reorganisation involving splitting the Issuer or any such Material Group Companies into two or more separate companies or entities, if such transaction would have a Material Adverse Effect. The Issuer shall notify the Trustee of any such transaction, providing relevant details thereof, as well as, if applicable, its reasons for believing that the proposed transaction would not have a Material Adverse Effect.
(d) Acquisitions: The Issuer shall not, and shall ensure that no other Group Company will, acquire any company, shares, securities, business or undertaking (or any interest in any of them), unless the transaction is carried out at arm's length terms and provided that it does not have a Material Adverse Effect.
(e) Disposals: The Issuer shall not, and shall procure that no other Group Company will, sell, transfer or otherwise dispose of all or substantially all of its assets (including shares or other securities in any person) or operations (other than to the Issuer or any of its wholly-owned Subsidiaries), unless such sale, transfer or disposal is carried out in the ordinary course of business or in accordance with the overall strategy of the Group and would not have a Material Adverse Effect.
(f) Financial Indebtedness: The Issuer shall not, and shall ensure that no other Group Company will, incur any new Financial Indebtedness or maintain any existing Financial Indebtedness, provided however that the Issuer and any other Group Company shall have a right to incur and maintain Financial Indebtedness that constitutes Permitted Financial
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Indebtedness.
(g) Negative pledge: The Issuer shall not, and shall ensure that no other Group Company will, create or allow to subsist, retain, provide, prolong or renew any security over any of its/their assets (present or future) to secure any loan or other indebtedness, provided that the Group Companies have a right to create or allow to subsist, retain, provide, prolong and renew any Permitted Security.
(h) Financial support: No member of the Group shall directly or indirectly make or grant any loans, grant any credit or give any guarantee or indemnity to or for the benefit of any person or group or otherwise voluntary assume any financial liability, whether actual or contingent, in respect of any other person or group, not being a member of the Group, except for Permitted Financial Support;
(i) Continuation of business: The Issuer shall ensure that no material change is made to the general nature of the business carried on by the Group as of the Settlement Date (and for the avoidance of doubt, any extension of the business of the Group into businesses similar or complimentary to the business previously conducted, shall not constitute a material change for the purposes of this undertaking).
(j) Corporate status: The Issuer shall not change its type of organisation or jurisdiction of incorporation.
(k) Insurances: The Issuer shall, and shall ensure that all other Group Companies will, maintain insurances or captive arrangements on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.
(l) Arm's length transactions: The Issuer shall not, and the Issuer shall ensure that no member of the Group shall, engage in, directly or indirectly, any transaction with any party (other than between the Issuer and a Guarantor or between two or more Guarantors) except on arm's length terms.
(m) Compliance with laws: The Issuer shall, and shall ensure that all other Group Companies will, comply in all material respects with all laws and regulations it or they may be subject to from time to time to the extent that failure to comply with such laws and regulations would have a Material Adverse Effect.
(n) Nomination of Material Group Companies: The Issuer shall prior to release of funds from the Escrow Account and thereafter once every year (simultaneously with the delivery to the Bond Trustee of the yearly audited accounts of the Group) and upon acquisition of material assets by a Group Company nominate Material Group Companies. The Issuer (as applicable) shall, subject to the Security Principles, nominate as Material Group Companies (a) such Group Companies as are necessary to ensure that the Issuer and the Material Group Companies in aggregate account for at least 80% of the Group's EBITDA and total assets, and (b) any Group Company whose EBITDA or assets constitutes more than 10% of the Group's EBITDA or total assets on a consolidated basis based on the preceding four financial quarters. If the aggregate EBITDA of all the Material Group Companies as determined pursuant to the above criteria is less than 80% of the consolidated EBITDA or assets of the Group, the Group Company with the greatest EBITDA or assets which is not a Material Company shall, subject to the Security Principles, become a Material Company, and this process shall be repeated until such 80% threshold is attained. If a Group Company has been acquired since the 25
date at which the latest Financial Statements of the Group were prepared, the financial statements shall be deemed to be adjusted in order to take into account the acquisition of that Group Company.
The Issuer shall ensure that each such Material Group Company no later than 60 days after its nomination provide Security in accordance with the Security Principles.
The identity of the Material Group Companies nominated by the Issuer in accordance with this paragraph shall be listed in the compliance certificate to be provided to the Bond Trustee in accordance with the Information Undertakings.
(o) Subsidiary distribution: The Issuer shall not permit any of its Subsidiaries to create or permit to exist any contractual obligation (or encumbrance) restricting the right of any Subsidiary to pay dividends or make other distributions to its shareholders, other than permitting to subsist such contractual obligation which is not reasonably likely to prevent the Issuer from complying with its payment obligations under the Bond Agreement.
(p) Intellectual property: The Issuer shall (and shall ensure that all other Group Companies) (i) preserve and maintain the subsistence and validity of the Intellectual Property which are material in order for the Group to conduct its business; (ii) use reasonable endeavours to prevent infringement in any material respect of any Intellectual Property which is material for the Group to conduct its business, but it shall be free to deal with those assets in the ordinary course of its business (including, without limitation, allowing its Intellectual Property to lapse if no longer material to its business) until an Event of Default has occurred which is continuing and in which notice has been served by the Trustee.
Permitted Means any Distribution by: Distribution (a) a Subsidiary of the Issuer, if such Distribution is made to another Group Company and, if made by a Group Company which is not wholly-owned, is made on a pro rata basis; and
(b) by the Issuer to the Parent or its Affiliates for funding, payment or reimbursement of administration cost and services limited to NOK 1,000,000 for any financial year, provided that no Event of Default is continuing or would result from such Distribution.
Permitted Means any Financial Indebtedness (or the refinancing of any Financial Financial Indebtedness outstanding at the time of the refinancing): Indebtedness (a) under the Finance Documents;
(b) incurred under Existing Debt (provided it shall be included as "Permitted Financial Indebtedness" only up until the first release of funds from the Escrow Account);
(c) incurred under finance or capital leases of equipment, computers or real property in the ordinary course of business;
(d) in the form of any Intercompany Loans;
(e) any loans between Group Companies (other than to the Issuer) that do not constitute Intercompany Loans;
(f) in the form of any Subordinated Capital; 26
(g) arising between Group Companies under any cash pooling arrangement of the Group;
(h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability in the ordinary course of business of a Group Company;
(i) incurred under any advance or deferred purchase agreement on normal commercial terms by any member of the Group from any of its trading partners in the ordinary course of its trading activities;
(j) incurred by the Issuer, if such Financial Indebtedness meets the Incurrence Test tested pro forma including such new Financial Indebtedness, and is incurred as a result of a Tap Issue;
(k) incurred as a result of any Group Company acquiring another entity (or operations) and which is due to such acquired entity holding indebtedness, provided that such indebtedness is either (i) repaid, or (ii) otherwise refinanced by the Issuer as set out in paragraph (j) above within ninety (90) days of completion of such acquisition or transfer;
(l) under any pension and tax liabilities incurred in the ordinary course of business; or
(m) incurred under paragraph (h) of the definition of "Permitted Financial Support".
Permitted Means any guarantee, loan or other financial support: Financial Support (a) granted under the Finance Documents;
(b) granted under Existing Debt (provided it shall be included as "Permitted Financial Support" only up until the first release of funds from the Escrow Account);
(c) granted in respect of any Tap Issue, provided that such guarantee is granted in favour of the Bond Trustee on the behalf of the Bondholders in accordance with the terms of the Bond Agreement;
(d) permitted under paragraphs (d), (e) and (g) of the definition of "Permitted Financial Indebtedness";
(e) which constitutes a trade credit or guarantee issued in respect of a liability incurred by another Group Company in the ordinary course of business;
(f) for any rental obligations in respect of any real property leased by a Group Company in the ordinary course of business and on normal commercial terms;
(g) arising by operation of law and in the ordinary course of business and not as a result of any default or omission; or
(h) arising in the ordinary course of banking arrangements for the purposes of netting debt and credit balances between Group Companies.
Permitted Means any security: Security (a) created under the Finance Documents;
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(b) created in respect of Existing Debt (provided it shall be included as "Permitted Security" only up until the first release of funds from the Escrow Account);
(c) created in respect of a Tap Issue, provided that such security is granted in favour of the Bond Trustee on behalf of the Bondholders in accordance with the terms of the Bond Agreement;
(d) arising by operation of law or in the ordinary course of trading and not as a result of any default or omission;
(e) arising in the ordinary course of banking arrangements for the purposes of netting debt and credit balances of Group Companies;
(f) in the form of rental deposits or other guarantees in respect of any lease agreement including in relation to real property entered into by a Group Company in the ordinary course of business and on normal commercial terms; or
(g) granted under Permitted Financial Indebtedness in accordance with paragraph (k) of the definition of "Permitted Financial Indebtedness" and that such security is discharged upon repayment or refinancing of such Financial Indebtedness with the Issuer as the new borrower.
Tap Issue The Issuer may, provided that the Incurrence Test is met, at one or more occasions issue additional Bonds under the Bond Issue (each such issue, a "Tap Issue"), until the outstanding loan amount equals the Maximum Loan Amount (less the Nominal Amount of any previously redeemed Bonds). The additional Bonds issued in a Tap Issue shall be subject to the terms and conditions of the Finance Documents.
Incurrence Test The Incurrence Test is met if the:
(i) Leverage Ratio is not greater than 4.00x; and (ii) Interest Cover Ratio is greater than 3.00x.
The calculation of (i) - (ii) above shall be made as per a testing date determined by the Issuer, falling no earlier than one month prior to the event relevant for the application of the Incurrence Test.
The Net Interest Bearing Debt shall be measured on the relevant testing date so determined, but include any new Financial Indebtedness incurred under any Tap Issue in respect of which the Incurrence Test is applied (however, any cash balance resulting from the incurrence of such new Financial Indebtedness shall not reduce the Net Interest Bearing Debt).
The figures for the EBITDA for the Relevant Period ending on the last day of the period covered by the most recent Financial Report shall be used for the Incurrence Test, but adjusted so that:
(a) entities, assets or operations acquired or disposed of by the Group during the Relevant Period, or after the end of the Relevant Period but before the relevant testing date, shall be included or excluded (as applicable), pro forma, for the entire Relevant Period; and
(b) any entity to be acquired with the proceeds from a Tap Issue shall be included, pro forma, for the entire Relevant Period.
Information The Bond Agreement shall include relevant information undertakings (as customary in the Norwegian high-yield bond market). 28
Undertakings In addition to the customary undertaking to provide compliance certificates in connection with the publication of financial reports, the Issuer shall upon in all events which shall require application of the Incurrence Test submit to the Bond Trustee a compliance certificate which shall also contain calculations and figures in respect of the ratio of Net Interest Bearing Debt to EBITDA.
The Issuer shall, without being requested to do so, prepare:
(i) its audited unconsolidated and consolidated annual audited financial statements and make them available on its website in the English language (alternatively by arranging for publication at Stamdata) as soon as they become available, and not later than 120 days after the end of the financial year; and (ii) its unaudited consolidated quarterly financial statements and make them available on its website in the English language (alternatively by arranging for publication on Stamdata) as soon as they become available, and not later than 60 days after the end of the relevant quarter.
in respect of both (i) and (ii) above, the financial statements shall specifically include, for the Relevant Period, EBITDA and Net Interest Bearing Debt (and otherwise as required under the Incurrence Test) in respect of the Group.
Change of Upon a Change of Control Event occurring, each Bondholder shall have a right to Control (Put require that the Issuer redeems the relevant Bondholder's Bonds (put option) at a Option) price of 101% of par value (plus accrued and unpaid interest), such put option to be exercised within 60 days following the notice of a Change of Control Event. The settlement date of the put option(s) shall be on the 5th Business Day after the end of the 60 days period.
For further details on put options, please refer to clause 10.3 in the Bond Agreement.
Change of Change of Control Event means any Person or group of Persons acting in concert Control Event gaining Decisive Influence over the Issuer (other than the Sponsor or any fund managed by the Sponsor and/or any other party over whom any of them have Decisive Influence).
"Decisive Influence" means a Person having, as a result of an agreement, understanding and/or other arrangement and/or through the direct and/or indirect ownership of shares and/or other ownership interests in another Person:
(i) a majority of the voting rights in that other Person; or (ii) a right to elect or remove a majority of the members of the board of directors of that other Person.
Clean-up Call If Bonds representing more than 90% of the outstanding Bonds have been repurchased in relation to a Change of Control Event (Put Option), the Issuer may at its election repurchase all the remaining outstanding Bonds at a price of 101% of Nominal Amount (plus accrued interest) by notifying the remaining Bondholders of its intention to do so no later than 20 days after the settlement date for the Change of Control (Put Option). Such prepayment of Bonds pursuant to the Clean- Up Call may occur at the earliest on the 15th day following the date of such notice in respect of the Clean-Up Call.
Issuer's The Issuer and the Group Companies each have the right to acquire, subscribe and ownership of own the Bonds. Such Bonds may at the Issuer’s discretion be retained or sold. Bonds
Governing law Norwegian for the Bond Agreement, Norwegian or local law as applicable for the
29 and jurisdiction Security Documents.
Taxation The Issuer shall pay any stamp duty and other public fees accruing in connection with issuance of the Bonds or the Security Documents, but not in respect of trading of the Bonds in the secondary market (except to the extent required by applicable laws), and the Issuer shall deduct before payment to the Bondholders at source any applicable withholding tax payable pursuant to law, subject to standard gross up and gross up call provisions.
Registration The Bonds are registered electronically with the Norwegian Central Securities Depository ("VPS"), Fred. Olsens gate 1, 0051 Oslo, Norway. Principal and interest accrued will be credited the Bondholders through VPS.
Paying Agent Danske Bank.
Market making No market-maker agreement has been made for this Bond Issue.
Transfer The Bonds are freely transferable and may be pledged, subject to the following: restrictions (i) Bondholders located in the United States will not be permitted to transfer the Bonds except (a) subject to an effective registration statement under the Securities Act, (b) to a person that the bondholder reasonably believes is a QIB within the meaning of Rule 144A that is purchasing for its own account, or the account of another QIB, to whom notice is given that the resale, pledge or other transfer may be made in reliance on Rule 144A, (c) outside the United States in accordance with Regulation S under the Securities Act in a transaction on the relevant exchange, and (d) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available).
(ii) Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable from time to time under local laws to which a bondholder may be subject (due e.g. to its nationality, its residency, its registered address, its place(s) for doing business). Each bondholder must ensure compliance with local laws and regulations applicable at own cost and expense.
(iii) Notwithstanding the above, a bondholder which has purchased the Bonds in contradiction to mandatory restrictions applicable may nevertheless utilise its voting rights under the Bond Agreement.
Limitation of All claims under the Bond Agreement for payment, including interest and claims principal, will be subject to the legislation regarding time-bar provisions of Norway (Nw. foreldelsesloven), i.e. 3 years for interest payments and 10 years for principal.
Business Day Means that if the last day of any Interest Period originally falls on a day that is not Convention a Business Day, the Interest Period will be extended to include the first following Business Day unless that day falls in the next calendar month, in which case the Interest Period will be shortened to the first preceding Business Day (Modified Following).
Bondholders' The Bondholders’ Meeting represents the supreme authority of the Bondholders Meeting community in all matters relating to the Bonds, and has the power to make all decisions altering the terms and conditions of the Bonds, including, but not limited to, any reduction of principal or interest and any conversion of the Bonds into other capital classes. The Bondholders' Meeting may not adopt resolutions which will give certain Bondholders an unreasonable advantage at the expense of other Bondholders.
Subject to the power of the Bond Trustee to take certain action as set out in Clause 16.1 in the Bond Agreement (Power to represent the Bondholders), if a resolution by,
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or an approval of, the Bondholders is required, such resolution may be passed at a Bondholders' Meeting. Resolutions passed at any Bondholders' Meeting will be binding upon all Bondholders.
At least 50 per cent. of the Voting Bonds (as defined in the Bond Agreement) must be represented at a Bondholders' Meeting for a quorum to be present. Resolutions will be passed by simple majority of the Voting Bonds represented at the Bondholders' Meeting, however so that a majority of at least 2/3 of the Voting Bonds represented at the Bondholders' Meeting is required for approval of any waiver or amendment of any provisions of these Bond Terms, including a change of Issuer and change of Bond Trustee.
For more details on the Bondholders' rights and representation pursuant to the Bonds, as well as information about the procedures for arranging a Bondholders' Meeting and voting rules, please see clause 15 of the Bond Agreement, attached hereto as Appendix 1.
5.2 The Guarantees
The Guarantees are joint and several unconditional and irrevocable Norwegian law guarantees (Nw. selvskyldnerkausjon) made by each of the Guarantors to the benefit of the Bond Trustee as continuing security for the due and punctual payment, discharge and performance of the Secured Obligations (as defined in the Bond Agreement). The Guarantees are governed by a guarantee document dated 5 April 2017 (the "Guarantee").
Pursuant to the Guarantee:
(i) each Guarantor, jointly and severally, irrevocably and unconditionally guarantee as independent primary obligors (Nw. selvskyldnerkausjonist) to the Bond Trustee (on behalf of the Bondholders) the payment, discharge and punctual performance of the Secured Obligations on the Bond Trustee's demand until the expiry of the Security Period (as defined in the Bond Agreement);
(ii) each Guarantor irrevocably and unconditionally undertakes with the Bond Trustee (on behalf of the Bondholders) that it shall pay any amount owed by a Guarantor in connection with the Secured Obligations as if it was the principal obligor;
(iii) each Guarantor irrevocably and unconditionally indemnifies the Bond Trustee (on behalf of the Bondholders) against any cost, loss or liability suffered by the Bond Trustee or the Bondholders if any of the Secured Obligations is or becomes unenforceable, invalid or illegal;
(iv) each Guarantor undertakes not to do or cause or permit to be done anything, or omit to take any action, which will, or could be reasonably expected to adversely affect the rights of the Bond Trustee under the Guarantee, or cause an Event of Default to occur, or which is in any way inconsistent with or depreciates, jeopardises or otherwise prejudices the rights of the Bond Trustee under the Guarantee;
(v) each Guarantor shall promptly do all such acts or execute all such documents (including assignments, transfers, notices and instructions) as the Bond Trustee may reasonably specify (and in such form as the Bond Trustee may reasonably require in favour of the Bond Trustee or its nominee(s)) to fulfil the intention of the Guarantees;
(vi) Upon and at any time following the occurrence of an Event of Default which is continuing the Guarantees are enforceable and the Bond Trustee may (at its discretion) enforce all or any part of the Guarantees created by the Guarantee in accordance with the applicable statutory procedures of enforcement.
5.3 Listing
The Company has applied for listing of Bonds on Oslo Børs, and admission to trading is expected to be on or about 21 September 2017 under ticker code "CARE01" and with ISIN NO 001 078896.1. Neither the Company nor any other members of the Group have securities listed on any EEA regulated market.
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5.4 Expenses related to the issuance and listing of the Bonds
The Company shall cover all expenses in connection with the Bond Issue such as preparation of the Bond Agreement, review and approval of the Prospectus from the FSA, listing of the Bonds on Oslo Børs and registration and administration of the loan in the VPS in the accordance with the agreement between the Company and the VPS. The fees payable for listing on Oslo Børs amount to approximately NOK 50,000 and the fees payable for review and approval from the FSA amount to NOK 76,000. The total costs incurred by the Company in connection with the issuance and listing of the Bonds are expected to amount to approximately MNOK 11.16, of which services provided by the Manager amount to approximately MNOK 9.14, services provided by the Bond Trustee amount to approximately NOK 450,000, services provided by Ernst & Young AS amount to approximately NOK 700,000 and services provided by Advokatfirmaet Schjødt AS amount to approximately NOK 750,000.
5.5 Advisers
ABG Sundal Collier ASA has acted as Manager in relation to the Bond Issue. Advokatfirmaet Schjødt AS is acting as legal adviser to the Company. 5.6 Interests of natural and legal persons involved in the Bond
The Manager or their affiliates have provided from time to time, and will provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager, their employees and any affiliate may currently own existing Shares and/or bonds in the Company. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager received a commission in connection with the issue of the Bonds.
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6. INFORMATION ABOUT THE COMPANY AND THE UNICARE GROUP 6.1 The Company
Care Bidco AS was incorporated on 5 January 2016 and registered in the Norwegian Register of Business Enterprises on 12 January 2016, with registration number 916 544 669. The Company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The Company has no securities listed on any regulated market.
The Company's registered address and the Group's headquarters' address is Pilestredet 56, 0167 Oslo, Norway. The Company's telephone number is +47 23 29 21 00 and its web address is www.unicare.no.
According to Section 3 of the Articles of Association of the Company, the purpose of the Company is trade with and investment in real estate, stocks and shares and other properties, and to engage in all such other business activities as are associated with the above objects.
The Company is a holding company with no employees and the parent company of the Group. As all operations of the Group are carried out in, and all fixed assets and employees are held by, the Company's subsidiaries, the Company is dependent on other entities in the Group. For information concerning the Company's board, please see section 9.1. For details on the management of the Group, please see section 9.2. 6.2 Overview of Unicare
The Group's principal activities are conducted through subsidiaries of the Company under the brand name Unicare.
Unicare is a provider of health care services, with 36 locations/units in Norway and 10 units in Sweden, and around 2,800 employees. Its principal activities include nursing homes, home care services, rehabilitation, health clinics, and psychology and occupational health, providing related revenues in excess of NOK 1,300 million.
The Group has a substantial portfolio of continuous and long term contracts with solid counterparties, including the public sector (regional health authorities (RHAs), the Norwegian Labour and Welfare Administration (NAV) and municipalities) and large corporates.
6.3 Description of the legal structure of the Group
6.3.1 General
The Group and the Unicare brand were acquired by G Square Capital in 2016, who is the largest shareholder with approximately 67% ownership share. Unicare Holding AS and Care Bidco AS are controlled by Care Holdco AS, which in turn is controlled by G Square Capital II, L.P. G Square Healthcare Private Equity LLP is a Limited Liability Partnership incorporated in England and Wales (registered under No. OC385628), authorised and regulated by the Financial Conduct Authority, with registered offices at 28 Savile Row, London W1S 2EU, acting as Manager of G Square Capital II, L.P., an English Limited Partnership established in 2016 ("Investor" or the “Fund”).
Please find below a chart describing the legal structure of the Group:
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6.3.2 Unicare Holding AS
Unicare Holding AS is the immediate subsidiary of the Company and a holding company managing the various divisions in which the Group operates. Care Bidco holds 100% of the shares in Unicare Holding AS which in turn holds 100% of the shares in each direct subsidiary, as illustrated by the Group chart above.
Unicare Holding AS was incorporated on 8 September 2010 and registered in the Norwegian Register of Business Enterprises on 27 September 2010, with registration number 995 986 973 and registered address at Pilestredet 56, 0167 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. Unicare Holding AS is a holding company with direct ownership of all the Group's Norwegian subsidiaries and indirect ownership of the Swedish entities through Unicare Sverige AS.
According to Section 3 of the Articles of Association of Unicare Holding AS, the purpose of Unicare Holding AS is to provide preventive health services for companies and institutions, conducting consultative activities in the fields of health, safety and environment, and operations with related type of activity.
Unicare Holding AS is also a Guarantor to the bond loan.
6.3.3 Other subsidiaries
Unicare Fram AS (Guarantor) Unicare Fram AS was incorporated on 7 June 1996 and registered in the Norwegian Register of Business Enterprises on 28 June 1996, with registration number 976 547 993 and registered address at Rykkinnveien 100, 1349 Rykkinn. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Fram AS, pursuant to
34 section 3 of the company's articles of association, is to offer health and rehabilitation services, and to carry out research and development work within the rehabilitation field.
Unicare Hokksund AS (Guarantor) Unicare Hokksund AS was incorporated on 12 November 1990 and registered in the Norwegian Register of Business Enterprises on 20 February 1995, with registration number 959 678 839 and registered address at Loesmoveien 79, 3300 Hokksund. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Hokksund AS, pursuant to section 3 of the company's articles of association, is to operate a rehabilitation centre and to perform ancillary activities thereto.
Unicare Friskvernklinikken AS (Guarantor) Unicare Friskvernklinikken AS was incorporated on 5 January 1996 and registered in the Norwegian Register of Business Enterprises on 9 January 1996, with registration number 975 984 168 and registered address at Knud Askers vei 20, 1383 Asker. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Friskvernklinikken AS, pursuant to section 3 of the company's articles of association, is to carry out preventative and health promoting work, provide rehabilitation to patients in need of treatment and to perform any ancillary activities thereto, including engagements in other companies
Unicare Jeløy AS (Guarantor) Unicare Jeløy AS was incorporated on 20 June 2001 and registered in the Norwegian Register of Business Enterprises on 30 June 2001, with registration number 983 478 778 and registered address at Bråtengata 94, 1517 Moss. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Jeløy AS, pursuant to section 3 of the company's articles of association, is to run a physical therapy and rehabilitation business and to perform any ancillary activities thereto, including engagements in other companies.
Please note that the Guarantor Unicare Jeløy AS changed its name from Jeløy Kurbad AS after the date of issuance of the bonds
Unicare Steffensrud AS Unicare Steffensrud AS was incorporated on 27 May 1982 and registered in the Norwegian Register of Business Enterprises on 19 February 1995, with registration number 932 191 482 and registered address at Vestre Toten veg 1530, 2846 Bøverbru. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Steffensrud AS is to provide medical and employment related rehabilitation.
Unicare Psykolog AS Unicare Psykolog AS was incorporated on 26 November 2003 and registered in the Norwegian Register of Business Enterprises on 10 January 2004, with registration number 986 319 492 and registered address at Pilestredet 56, 0167 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Psykolog AS is to sell psychology, physiotherapy and medical services to private and public undertakings, and to perform any ancillary activities thereto.
Unicare Helse AS Unicare Helse AS was incorporated on 1 August 2008 and registered in the Norwegian Register of Business Enterprises on 13 August 2008, with registration number 992 975 032 and registered address at Pilestredet 56, 0167 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Helse AS is to offer preventative health services to companies and institutions, run a consultation service within Health, Environment and Safety and to perform any ancillary activities thereto.
Unicare Omsorg AS (Guarantor) Unicare Omsorg AS was incorporated on 12 March 2002 and registered in the Norwegian Register of Business Enterprises on 18 March 2002, with registration number 984 328 923 and registered address at Pilestredet 56, 0167 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Omsorg AS, pursuant to section 3 of the company's articles of association, is to offer services within the geriatric and rehabilitation sector, and to perform any ancillary activities thereto.
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Unicare Hjemmetjenester AS Unicare Hjemmetjenester AS was incorporated on 1 May 2006 and registered in the Norwegian Register of Business Enterprises on 2 August 2006, with registration number 989 951 750 and registered address at Pilestredet 56, 0167 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Hjemmetjenester AS is to provide practical help and care both within and out of the home.
Unicare BAB AS Unicare BAB AS was incorporated on 21 October 2006 and registered in the Norwegian Register of Business Enterprises on 14 November 2006, with registration number 990 500 630 and registered address at Fyrstikkalléen 19, 0661 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare BAB AS is to provide care services and to perform any ancillary activities thereto.
Unicare Små Enheter AS Unicare Små Enheter AS was incorporated on 1 February 1994 and registered in the Norwegian Register of Business Enterprises on 20 February 1995, with registration number 968 827 650 and registered address at Kristinelundveien 6, 0268 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Små Enheter AS is to work in child welfare services and substance abuse care, suggest developments within social pedagogic practice and treatment initiatives aimed at children and teenagers with complex issues, and to perform any ancillary activities thereto.
Bakke, senter for mestring og rehabilitering AS Bakke, senter for mestring og rehabilitering AS was incorporated on 1 November 2004 and registered in the Norwegian Register of Business Enterprises on 6 January 2005, with registration number 987 658 584 and registered address at Iddefjordsveien 885, 1765 Halden. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Bakke, senter for mestring og rehabilitering AS is operation of rehabilitation institutions and to perform any ancillary activities thereto, offering specialised rehabilitation on day visits or on overnight stay basis.
Landaasen Rehabiliteringssenter AS Landaasen Rehabiliteringssenter AS was incorporated on 26 May 1993 and registered in the Norwegian Register of Business Enterprises on 12 March 1995, with a registration number 966 867 450 and registered address at Landåsvegen 747, 2861 Landåsbygda. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Landaasen Rehabiliteringssenter AS is to run a rehabilitation business together with investments in an development of other companies, and to perform any ancillary activities thereto, offering specialized rehabilitation within the areas of tinnitus, heart disease, cancer, chronic muscle pain, spinal problems, leg amputation and rehabilitation once the prosthesis is fitted.
Unicare Sverige AS Unicare Sverige AS was incorporated on 27 April 2016 and registered in the Norwegian Register of Business Enterprises on 4 May 2016, with registration number 917 129 606 and registered address at Pilestredet 56, 0167 Oslo. The company is incorporated in Norway and organised as a private limited liability company in accordance with the Norwegian Private Limited Companies Act. The purpose of Unicare Sverige AS is to carry out business focused on the development of and investment in health services and to perform any ancillary activities thereto.
Unicare Sverige AS is the direct parent company of the Swedish branch of the Unicare Group.
Unicare Sverige AB Unicare Sverige AB was formed and registered with the Swedish Companies Registration Office in Sweden on 14 December 2016 with organization number 559091-1367. The company operates in Sweden and is organized as a limited company under the Swedish Companies Act. The purpose of Unicare Sverige AB is to conduct activities that focus on healthcare and medical care, and to own shares within the healthcare and medical care sector. Unicare Sverige AB is a holding company and owns 100% of the shares in the following companies:
• Unicare Vård i Jönköpings län AB, organization number 556481-0330 • Unicare Vård i Kronoberg AB, organization number 556741-5392 • Unicare Vård i Västra Götaland AB, organization number 556757-5708 • Unicare Vård i Södermanland AB, organization number 556794-0167
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• Unicare Vård Gotland AB, organization number 556770-3318 • Unicare Vård i Värmland AB, organization number 556931-6192 • Unicare Vård i Dalarna AB, organization number 556800-9277 • Unicare Apladalen Vård AB, organization number 556458-0594
The abovementioned companies are organized as limited companies under the Swedish Companies Act with the purpose to conduct activities that focus on healthcare and medical care. All subsidiaries of Unicare Sverige AB operate in Sweden and are private providers of health services through the operation of ten health clinics in the Southern and central part of Sweden. All ten health clinics have contracts with the government as part of the primary healthcare service following the "free choice of healthcare" initiative. The terms of the contracts with the Swedish government vary between the counties where the clinics are located.
6.4 Business overview
6.4.1 Principal activities
Unicare is a provider of care services, health clinics and in specialist health services. Unicare's principal activities include nursing homes, home care services, rehabilitation, health clinics, and psychology and occupational health, providing related revenues in excess of NOK 1,300 million.
The Group is structured in five divisions: Rehabilitation, Psychology & Occupational Health, Nursing homes & Home care services, Homes and Care and International (as illustrated by the Group chart in 6.3.1 above). The markets in which the Group operates are explained in chapter 7 below.
6.4.2 Revenue distribution
Please find below a chart describing the distribution of the Group's revenues as per the end of Q2 2017:
Revenue distribution operating units YTD Q2 2017
Nursing Homes Nursing Homes 36 % Rehabilitation
Sweden
OHS & Psychology Homes & Care 6 %
Rehabilitation OHS & Psychology 23 %
Homes & Care 14 %
Sweden 21 %
6.4.3 Rehabilitation
Unicare is a supplier of rehabilitation, offering specialized rehabilitation, surveys and assessment services in hospitals and clinics in the South-East of Norway. Target groups include patients suffering from strokes, traumatic brain injuries, CFS/ME, obesity, amputations and neurological and neuromuscular diseases. Unicare focuses on rehabilitation treatments that enable patients to return to work faster, irrespective of diagnosis. Through the Company's subsidiaries within the Rehabilitation division, Unicare offers continuing agreements with South-East RHA and NAV for each clinic and each rehabilitation treatment. Current agreements include a
37 pre-determined number of hours for each treatment, and utilisation below 95% will trigger reimbursement to the RHA for unused capacity.
6.4.4 Psychology & Occupational Health Services
Unicare is a provider within psychiatric consultations in Norway and a provider of occupational health services ("OHS") for employers. Through the Company's subsidiaries within the psychology segment of the Psychology & Occupational Health division, Unicare has a nationwide presence with a total of seven clinics spread across the country. Agreements include a contract with the South-East RHA and NAV. Within the occupational health segment Unicare assists in all parts of the systematic HSE work, offering services to a wide range of businesses, both public and private, with over 300 clients. Occupational health services are primarily offered in the Oslo region but include nationwide coverage with representatives in six cities.
6.4.5 Nursing homes & Home care services
Unicare is a private operator of nursing homes in Norway, running 6 of the 15 commercially operated nursing homes in the city of Oslo through the Nursing homes & Home care services division. Through subsidiaries of the Company, Unicare holds contracts with Oslo municipality based on six year agreements with a two-year extension option.
6.4.6 Homes and Care
Through the Company's subsidiaries, Unicare offers around the clock co-located homes, auxiliary housing and various other day and weekend assistance, in addition to child welfare. The Homes and Care division offers three main services for different segments: child welfare for children in need of psychiatric treatment, institutional care for individuals with disabilities and user controlled personal assistance. Unicare has qualified competence in institutional care for minors with special needs and in need of complex treatment. The services carried out through the Homes and Care division are largely regulated by The Norwegian Directorate for Children, Youth and Family Affairs (BUFdir). Unicare does not currently have a framework agreement with BUFdir but offers institutional care on a case by case basis. User controlled personal assistance is financed by the respective municipalities and individual tenders per user, and frame agreements are in place for auxiliary housing and respite care, where contract duration varies between 6 – 12 years.
6.4.7 International
Unicare entered the Swedish market in 2016 through the acquisition of Avonova Primärvård (now named Unicare Sweden). Unicare Sweden is a private provider of health services and operates ten health clinics in the Southern and central part of Sweden. Since the introduction of “free choice of healthcare” in 2009/2010, Unicare Sweden has grown to approximately 76,600 listed patients. All ten health clinics have contracts with the Swedish government as part of the primary healthcare service. The terms of the contracts with the government vary between counties.
6.5 Material contracts
The Group has a substantial portfolio of continuous and long term contracts with solid counterparties, including the public sector (regional health authorities (RHAs), the Norwegian Labour and Welfare Administration (NAV) and municipalities) and large corporates, with the two largest agreements providing an estimated aggregate over 55% to 60% of the revenue for 2017. All agreements are rewarded after separate tendering processes.
6.6 Litigation
From time to time the Company and/or the Group may become engaged in litigation or regulatory proceedings incidental to their business. Neither the Company nor the Guarantors are, or have been, involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company or the Guarantors are aware), as of the date of this Prospectus, and for the preceding 12 months, which may have, or have had in recent past, significant negative effects on the Company's, Guarantor's and/or the Group’s financial position or profitability.
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7. PRINCIPAL MARKETS 7.1 Introduction
The Nordics as well as the rest of Europe face many of the same challenges, i.e. a growing elderly population both in absolute and relative terms. In general, a relatively large portion of healthcare expenditures are funded by the public sector and many responsibilities are placed with the local authorities or governments. The Nordic countries rank in the world top ten in terms of healthcare spending per capita. A wide and far reaching involvement of the Government both organisationally and financially are prevalent in all the Nordic countries. Hence, the political environment and agenda often dictate the private investment activity, which in turn can be both positive and negative for private providers. The healthcare system is primarily funded by public sources, comprising financing from central and local governments and from the National Insurance Scheme.
Private providers form an increasingly integral part of the total healthcare service offering – a trend set to continue in the years ahead. Due to asymmetric demographic growth, significantly skewed towards a larger elderly population, and increased life expectancy on the back of medical and technological development, there is an increasing demand for Unicare's services, including nursing homes, home care services, rehabilitation, health clinics, and psychology and occupational health. There is political support towards “free choice of provider”, with rehabilitation services to become part of the program from 2017.
7.2 Rehabilitation
7.2.1 Key facts
The Rehabilitation market is based on treatment of medical conditions including, but not limited to, amputation, brain injury, cancer, cerebral palsy, musculoskeletal injuries, Parkinson's, stroke and more. The most widespread clients are those with work-related injuries, musculoskeletal injuries and endocrine disorders. Rehabilitation services help to restore movement and function to people disabled by disease or injury. Physicians and therapists create therapy plans that consider the unique needs, abilities and objectives of each patient. Services are provided either by inpatient care or outpatient care.
Unicare provides rehabilitation services for about 5,686 users in Norway and the primary competitor in the private rehabilitation market is Stamina Group.
7.2.2 General Industry drivers
Specialised rehabilitation in Norway is financed by the respective Regional Health Authority (RHA). NAV finances selected services that enable a quicker return to work (Nw. “raskere tilbake”) for patients on sick leave. Commercial providers must be certified by the RHA to be applicable for NAV contracts or patients deriving through the "free patient choice" arrangement. Certified institutions may participate in tenders for NAV contracts and such contracts are usually continuing contracts.
7.2.3 Market trends
There are three trending types of contracts that may generate revenue in the market for private institutions: (i) frame agreements with RHAs, (ii) contracts with NAV and (iii) to be a provider through the "free patient choice" arrangement. The RHAs award continuing frame agreements to selected rehabilitation institutions.
7.3 Psychology & Occupational Health
7.3.1 Key facts
Services within the Psychology & Occupational Health market include physical and physiological treatment, safety documentation, ergonomics, health training and education, psychosocial work, risk assessment and more, as well as assistance in all parts of the systematic HSE (health, safety and environment) work depending on the industry, needs and challenges.
Unicare provides psychology and occupational health services for about 4,500 users in Norway and the primary competitors in the private psychology and occupational health market are Aleris, Synergi Helse and Stamina Group.
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7.3.2 General Industry drivers
The general industry drivers within the psychology and occupational health market comprise of medium and large enterprises, both public and private. Approximately 1.5 million of 2.5 million employees in Norway work in companies that are subject to HSE-service requirements under the Employment Protection Act of 2011.1 Typical clients are industrials corporations and companies with employees who work nightshifts or are exposed to substantial amounts of physical or physiological strain. The four largest supplies in Norway include Unicare, Aleris, Stamina and Synergi Helse. Occupational health services are fully financed by customers. Occupational health services are however tax free if they are characterised as preventive. Occupational health service companies working for clients that are in the "Inclusive Workplace Scheme" can be refunded by NAV if they manage to help employees back to work from long-term sick leave.
7.3.3 Market trends
Larger clients will typically procure occupational health services through a tender process. Important considerations are price, service offering and competency. Contract length may vary, but is usually between three to five years including extension options. Some clients choose a running contract with annual renegotiations.
7.4 Homes and Care
7.4.1 Key facts
The Homes and Care market segment is regulated by the Norwegian Child Welfare Services Act (Nw. lov om barnevernstjenester), the primary authority being the BUFetat (the child welfare services division of the Norwegian Directorate for Children, Youth and Family Affairs) The other segments are regulated by the Health and Care Services Act (Nw. helse- og omsorgstjenesteloven), the primary authority being the municipalities.
Unicare provides homes and care services for about 136 users in Norway and the primary competitors in the private homes and care market are Aleris, Norlandia, Team Olivia and Humana.
7.4.2 General Industry drivers
There are five large private operators in Norway: Unicare, Norlandia, Team Olivia, Aleris and Humana, operating in a market almost entirely funded by the public sector.
7.4.3 Market trends
Public spending on institutional care for children and youth has been growing steadily in the later years, with a compound annual growth rate of 3.8% from 2011 to 2015 (source: BUFetat figures). Commercial providers form an integrated part of the market with a significant market provision.
7.5 Nursing homes & Home care services
7.5.1 Key facts
Home care services are granted to persons who fail daily required tasks due to illness, disability, age or other reasons. Nursing care is granted to persons that are unable to seek medical care outside their home due to illness, disability, age or other reasons. Home services typically involves assistance with acquiring household goods, cooking meals, cleaning, laundry and other services the patient needs assistance to perform. Nursing care typically involves assistance with wound care, administering drugs and other medical tasks as well as personal hygiene, nutrition and therapy. Other services within the sector include typical home services as well as training in the activities of daily life and participation in leisure activities.
Unicare provides nursing homes and home care services for about 1,113 users in Norway and the primary competitors in the private nursing homes and home care market are Aleris, Norlandia, Attendo and Humana.
1 NHO service "Statistikk og trender 2016/2017" (page 91)
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7.5.2 General Industry drivers
Home care is financed by the municipalities. Private providers can only operate in municipalities that have introduced the "free choice of provider" arrangement, which today constitutes ~34 municipalities. In these municipalities, users can choose freely between private and public providers.
7.5.3 Market trends
With an asymmetric demographic growth, significantly skewed towards a larger elderly population and increased life expectancy on the back of medical and technological development, Oslo will need 1,000 new nursing home beds before 2030 and 3,400 before 2040.2
7.6 The Swedish market
7.6.1 Key facts
Since the introduction of “free choice of healthcare” in 2009/2010 Sweden has allocated patients the right to choose between public and commercial providers of primary healthcare, generating a steady growth amongst commercial providers of health services and clinics in Sweden. Commercial healthcare clinics offer services such as primary care, child primary care, rehabilitation and maternity primary care.
Unicare provides healthcare services for about 76,600 users in Sweden and the primary competitors in the Swedish private healthcare market are Capio and Praktikertjanst.
7.6.2 General Industry drivers
With the government increasing choice for patients by allowing commercial providers to set up clinics in primary care and increasingly specialist care throughout Sweden there have been gains in productivity for commercial providers of healthcare.
7.6.3 Market trends
With a steadily growing population and increased spending on primary care this is a growing market. Since the introduction of “free choice of healthcare” in 2009/2010, commercial providers have experienced a steady growth in listed patients.
2 NHO Service “Effekten av konkurranse – Kvalitet og kostnader ved sykehjem i Oslo in 2016” (page 9)
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8. FINANCIAL INFORMATION
8.1 Annual accounts
The Company’s audited annual consolidated financial statements as of 31 December 2016 and the auditor's report for such financial statements is attached as Appendix 2. The financial statements for the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and the Norwegian Accounting Act. As the Company was previously an empty shelf company and has been in operation for less than two years, only the financial information from 2016 is included. For audited financial statements and the auditor's reports for the years ended 31 December 2015 and 2016 for the Guarantors, please see Appendices 3 to 8. The financial statements for the Guarantors have been prepared in accordance with Norwegian Generally Accepted Accounting Principles (NGAAP). The Group's unaudited Q1 and Q2 financial reports for 2017 are attached hereto as Appendices 9 and 10. Please find below a table detailing where the abovementioned annual accounts may be found. Financial reports 2016 2015 Care Bidco AS/Group3 Appendix 2 Income statement Page 9 Balance Sheet Page 11 Cash flow statement Page 13 Accounting policies and notes Page 15
Unicare Holding AS Appendix 3 Appendix 3 Income statement Page 22 Page 5 Balance Sheet Page 23 Page 6 Cash flow statement Page 32 Page 8 Accounting policies and notes Page 25 Page 9
Unicare Fram AS Appendix 4 Appendix 4 Income statement Page 19 Page 5 Balance Sheet Page 20 Page 6 Cash flow statement N/A* N/A* Accounting policies and notes Page 22 Page 8
Unicare Friskvernklinikken AS Appendix 5 Appendix 5 Income statement Page 19 Page 5 Balance Sheet Page 20 Page 7 Cash flow statement N/A* N/A* Accounting policies and notes Page 22 Page 8
Unicare Hokksund AS Appendix 6 Appendix 6 Income statement Page 25 Page 7
3 The Group did not contain the Company in the 2015 report
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Balance Sheet Page 26 Page 8 Cash flow statement Page 36 Page 11 Accounting policies and notes Page 28 Page 12
Unicare Jeløy AS Appendix 7 Appendix 7 Income statement Page 17 Page 5 Balance Sheet Page 18 Page 7 Cash flow statement N/A* N/A* Accounting policies and notes Page 20 Page 9
Unicare Omsorg AS Appendix 8 Appendix 8 Income statement Page 24 Page 6 Balance Sheet Page 25 Page 7 Cash flow statement Page 35 Page 17 Accounting policies and notes Page 27 Page 9 * Cash flow statements are not required for certain smaller companies pursuant to section 3-2 of the Norwegian Accounting Act (Nw. regnskapsloven). The aforementioned financial statements have primarily been audited by Berge & Lundal Revisjonsselskap AS, Rosenkrantz gate 20, 0160 Oslo, Norway, independent auditors, as stated in their independent auditor’s reports included herein. Berge & Lundal Revisjonsselskap AS is a member of the Norwegian Institute of Public Auditors (Nw: “Den Norske Revisorforening”). The financial statements for Unicare Jeløy AS (formerly Jeløy Kurbad AS) have been audited by Krogh Revisjon AS, Ekholtveien 114, 1526 Moss, Norway, independent auditors, as stated in their independent auditor’s reports included herein. Krogh Revisjon AS is a member of the Norwegian Institute of Public Auditors (Nw: “Den Norske Revisorforening”). The 2015 financial statements for Unicare Fram AS (formerly Fram Helserehab AS) have been audited by BDO AS, Munkedamsveien 45A, 0250 Oslo, Norway, independent auditors, as stated in their independent auditor’s reports included herein. BDO AS is a member of the Norwegian Institute of Public Auditors (Nw: “Den Norske Revisorforening”). The 2015 financial statements for Unicare Hokksund AS (formerly Hokksund Rehabiliteringssenter AS) have been audited by Lundes Revisjonskontor I DA, Parkveien 57, 0256 Oslo, Norway, independent auditors, as stated in their independent auditor’s reports included herein. Lundes Revisjonskontor I DA is a member of the Norwegian Institute of Public Auditors (Nw: “Den Norske Revisorforening”). 8.2 Lack of material adverse changes
There have been no material adverse changes in the Group's financial or trading position since the date of the last published audited financial statements, being 31 December 2016. There have been no material adverse changes in the prospects of the Company or Guarantors since the date of their last published audited financial statements, being 31 December 2016. 8.3 Selected audited historical financial information
The below selected historical financial information contains the Group's and each Guarantor's statement of income and statement of financial position for the years 2015 and 2016 and have been sourced from the audited financial statements mentioned under section 8.1. Please note that the Company was not part of the Group in 2015 and that Unicare Holding AS was the current parent of the Group at that time. As such, the consolidated financial statements for Unicare Holding AS for 2015 represent the Group's statement of income and statement of financial position for the year 2015. Please see section 8.4 below for selected financial information for the Group pursuant to the unaudited Q1 and Q2 2017 financial reports. 43
8.3.1 The Group
The Group's statement of income:
Care BidCo AS as parent of the Unicare Holding AS as parent of Group the Group
2016 2015
Figures in NOK thousand
OPERATING INCOME
Sales revenue 701 084 723 789
Other operating income 2 855 906
Net operating income 703 939 724 696
OPERATING EXPENSE
Cost of goods sold 83 484 47 551
Salaries 492 197 576 723
Depreciation and amortization 16 138 14 676
Write downs 61 601
Other operating expenses 90 977 76 019
Total operating expenses 682 859 715 572
Operating result 21 080 9 123
FINANCIAL INCOME AND FINANCIAL EXPENSES
Financial income 231 11 899
Financial expenses 6 785 475
Net financial items -6 554 11 424
Pre-tax result 14 525 20 547
Tax expense 4 923 2 990
Net result 9 602 17 557
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The Group's statement of financial position:
Care BidCo AS as parent of the Unicare Holding AS as parent of Group the Group
2016 2015
Figures in NOK thousand
Assets
FIXED ASSETS
Intangible assets
Goodwill 557 984 47 879
Intangible asset 264 202 5 884
Deferred tax assets 1 650
Total intangible assets 822 187 55 414
Fixed assets
Real property
Movables, inventory, equipment 28 716 8 285
Total fixed assets 28 716 8 285
Financial fixed assets
Investment in shares and units 0 30 494
Pension 1 446 688
Other receivables 502 224
Total financial fixed assets 1 948 31 407
Total fixed assets 852 851 95 107
CURRENT ASSETS
Inventory
Receivables
Accounts receivables 48 377 30 138
Other receivables 27 742 10 587
Total receivables 76 119 40 726
Cash and cash equivalents 102 462 68 653
Total current assets 178 581 109 379
Total assets 1 031 433 204 486
Equity and liabilities
EQUITY
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Paid in capital
Share capital 566 405
Share premium fund
Total paid in capital 566 405
Other equity 543 666 34 167
Total equity 544 232 34 573
LIABILITIES
Provisions
Pension liabilities 33 290 5 003
Deferred tax 14 211 0
Total provisions 47 502 5 003
Other long term debt
Debt to credit institutions 88 047 43 471
Shareholder loan
Other long term debt 629 0
Total other long term debt 88 677 43 471
Current liabilities
Accounts payable 22 061 11 875
Debt credit institutions
Tax payable 7 537 2 110
Public duties payable 42 789 36 550
Short term debt to shareholders
Other current liabilities 278 632 70 900
Total current liabilities 351 021 121 437
Total liabilities 487 200 169 913
TOTAL EQUITY AND LIABILITIES 1 031 433 204 486
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8.3.2 Please find an overview of each Guarantor's statement of income and financial position for the years 2015 and 2016 below:
Statement of income Unicare Holding AS
Operating income and operating expenses Note 2016 2015
Other operating income 15 554 075 11 031 553 Operating Income 15 554 075 11 031 553
Payroll expenses 1 11 374 920 7 318 438 3 1 551 324 1 446 215 Write down on tangible and intangible assets 3 0 601 834 Other operating expenses 1 6 421 176 3 952 450 Operating expenses 19 347 420 13 318 937
Operating profit -3 793 345 -2 287 384
Financial income and expenses Interest income from group entities 9 1 116 672 412 001 Other interest income 32 379 157 848 Other financial income 4, 8 34 523 594 33 194 896 Interest expense to group entities 9 114 492 260 880 Other Interest expenses 2 212 598 328 223 Other financial expenses 939 761 37 882 Net financial income and expenses 32 405 795 33 137 761
Operating result before tax 28 612 450 30 850 376 Tax on ordinary result 7 8 490 989 5 711 555 Operating result after tax 20 121 461 25 138 821
Annual net profit 20 121 461 25 138 821
Brought forward To other equity 20 121 461 25 138 821 Net brought forward 20 121 461 25 138 821
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Financial position Unicare Holding AS
Assets Note 2016 2015
Fixed assets Intangible fixed assets Concessions, patents, licences, trademarks, and similar 3 1 697 321 2 263 094 Deferred tax asset 7 17 206 44 836 Total intangible assets 1 714 527 2 307 930
Tangible fixed assets Equipment and other movables 2 583 577 1 233 701 Total tangible fixed assets 3 2 583 577 1 233 701
Financial fixed assets Investments in subsidiaries 4 161 419 850 141 375 377 Other receivables 8 60 156 566 0 Total financial fixed assets 221 576 416 141 375 377
Total fixed assets 225 874 520 144 917 009
Current assets
Debtors Accounts receivables 635 375 0 Other receivables 8 40 555 193 23 830 260 9 9 893 339 9 546 534 Total debtors 51 083 907 33 376 794
Cash and bank deposits 2 43 049 180 40 839 137
Total current assets 94 133 088 74 215 931
Total assets 320 007 608 219 132 940
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Equity and liabilities Note 2016 2015 Restricted equity Share capital 6 405 556 405 556 Other paid-in equity 15 072 678 15 072 678 Total restricted equity 15 478 233 15 478 233
Retained earnings Other equity 46 394 146 29 364 841 Total retained earnings 46 394 146 29 364 841
Total equity 5 61 872 379 44 843 074
Liabilities
Other long-term liabilities Liabilities to financial institutions 10 87 500 000 42 500 000 Total of other long term liabilities 10 87 500 000 42 500 000
Current liabilities Trade creditors 579 840 560 343 Tax payable 7 6 227 352 2 110 639 Public duties payable 869 841 575 212 8 8 944 029 13 636 833 9 152 815 057 113 647 082 Other short term liabilities 8 1 199 109 1 259 757 Total short term liabilities 170 635 228 131 789 866
Total liabilities 258 135 228 174 289 866
Total equity and liabilities 320 007 608 219 132 940
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Statement of income
Unicare Fram AS Note 2016 2015
Revenue 67 269 592 66 627 604 Other operating income 936 657 390 555 68 206 248 67 018 159
Raw materials and consumables used 5 050 583 3 124 700 Payroll expenses 1 38 187 867 39 616 873 3 2 465 739 1 122 061 Other operating expenses 1 19 969 274 18 211 374 65 673 463 62 075 008
2 532 785 4 943 151
Interest income from group entities 6 3 997 0 Other interest income 16 015 63 853 Interest expense to group entities 6 8 0 Other Interest expenses 9 818 56 472 Other financial expenses 18 280 1 272 -8 094 6 109
2 524 692 4 949 260 Tax on ordinary result 10 638 735 1 339 335 1 885 957 3 609 924
8 1 885 957 3 609 924
Group contribution 2 424 395 0 538 438 -3 609 924 1 885 957 3 609 924
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Financial position
Unicare Fram AS Note 2016 2015
Deferred tax asset 10 157 988 0
157 988 0
Buildings and land 3 3 807 375 4 613 343 Equipment and other movables 3 3 432 113 2 559 534 7 7 239 488 7 172 877
9 70 158 0 70 158 0
7 467 635 7 172 877
Inventories 248 063 453 065
248 063 453 065
Accounts receivables 7 596 134 437 038 Other receivables 2 889 443 3 912 146 6, 7 6 341 936 0 9 827 512 4 349 184
Cash and bank deposits 2 1 613 799 5 192 016 1 613 799 5 192 016
11 689 374 9 994 265
19 157 009 17 167 142
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Note 2016 2015
Share capital 4 250 000 250 000 Other paid-in equity 801 122 801 122 1 051 122 1 051 122
Other equity 3 751 206 4 289 644 3 751 206 4 289 644
8 4 802 327 5 340 766
Pension liabilities 9 823 563 85 000 Deferred tax 10 0 11 409 823 563 96 409
Trade creditors 5 3 808 510 3 398 575 Tax payable 10 0 1 246 572 Public duties payable 1 983 680 2 542 158 5 3 232 527 0 Other short term liabilities 4 506 401 4 542 662 13 531 119 11 729 967
14 354 682 11 826 376
19 157 009 17 167 142
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Statement of income
Unicare Friskvernklinikken AS
Operating income and operating expenses Note 2016 2015
Revenue 31 778 770 32 987 880 Operating Income 31 778 770 32 987 880
Raw materials and consumables used 35 466 105 086 Payroll expenses 1 17 597 263 16 868 304 Depreciation and amortisation expense 3 227 592 211 473 Other operating expenses 1 9 215 825 8 313 359 Operating expenses 27 076 145 25 498 222
Operating profit 4 702 625 7 489 657
Financial income and expenses Interest income from group entities 7 14 554 25 871 Other interest income 853 468 Other Interest expenses 1 870 233 Other financial expenses 26 629 0 Net financial income and expenses -13 091 26 107
Operating result before tax 4 689 533 7 515 764 Tax on ordinary result 6 1 179 139 -1 498 674 Operating result after tax 3 510 394 9 014 438
Annual net profit 3 510 394 9 014 438
Brought forward Group contribution 3 390 186 0 To other equity 4 120 209 9 014 438 Net brought forward 3 510 394 9 014 438
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Financial position
Unicare Friskvernklinikken AS
Assets Note 2016 2015
Deferred tax asset 6 162 137 211 214 Total intangible assets 162 137 211 214
Tangible fixed assets Equipment and other movables 3 496 683 468 193 Total tangible fixed assets 9 496 683 468 193
Other receivables 0 34 074 Total financial fixed assets 0 34 074
Total fixed assets 658 820 713 481
Debtors Accounts receivables 8, 9 348 565 2 387 498 Other receivables 8 252 089 5 802 509 Demand on payment of share capital 7 20 489 951 11 145 947 Total debtors 21 090 605 19 335 954
Cash and bank deposits 2 562 470 859 209
Total current assets 21 653 074 20 195 164
Total assets 22 311 894 20 908 644
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Equity and liabilities Note 2016 2015
Restricted equity Share capital 4, 5 2 122 000 2 122 000
Other paid-in equity 4 4 904 596 4 904 596 Total restricted equity 7 026 596 7 026 596
Retained earnings
Other equity 4 7 728 821 10 565 992 Total retained earnings 7 728 821 10 565 992
Total equity 14 755 418 17 592 588
Current liabilities
Certificate loans 4 520 248 0 Trade creditors 417 623 778 708
Public duties payable 1 103 560 1 148 145 Other short term liabilities 1 515 045 1 389 202
Total short term liabilities 7 556 476 3 316 056
Total liabilities 7 556 476 3 316 056
Total equity and liabilities 22 311 894 20 908 644
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Statement of income
Unicare Hokksund AS
Operating income and operating expenses Note 2016 2015
Revenue 80 735 278 73 317 936 Other operating income 404 576 406 299 Operating Income 81 139 854 73 724 235
Raw materials and consumables used 4 815 613 4 494 581 Changes in inv. of work in progress and finished goods -59 501 0 Payroll expenses 1 49 885 216 45 729 991 Depreciation and amortisation expense 3 2 221 023 1 669 829 Other operating expenses 1 19 541 107 21 277 277 Operating expenses 76 403 458 73 171 678
Operating profit 4 736 396 552 557
Financial income and expenses Other interest income 7 27 967 69 128 Increase in market value of financial current assets 6 764 6 292 Other Interest expenses 323 346 Net financial income and expenses 34 408 75 074
Operating result before tax 4 770 804 627 631 Tax on ordinary result 9 1 231 754 219 127 Operating result after tax 3 539 050 408 504
Annual net profit 3 539 050 408 504
Brought forward To other equity 3 539 050 0 Loss brought forward 0 -408 504 Net brought forward 4 3 539 050 408 504
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Financial position
Unicare Hokksund AS
Assets Note 2016 2015
Fixed assets Deferred tax asset 9 537 144 0 Total intangible assets 537 144 0
Tangible fixed assets Equipment and other movables 8 8 379 307 8 351 024 Total tangible fixed assets 3 8 379 307 8 351 024
Financial fixed assets Other receivables 10 176 695 392 163 Total financial fixed assets 176 695 392 163
Total fixed assets 9 093 146 8 743 187
Current assets
Inventories 11 224 419 164 918
Debtors Accounts receivables 8 346 332 67 826 Other receivables 144 420 2 234 349 Group receivables 7 13 435 960 0 Total debtors 13 926 712 2 302 175
Cash and bank deposits 2 1 601 394 11 934 283
Total current assets 15 752 525 14 401 376
Total assets 24 845 671 23 144 563
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Equity and liabilities Note 2016 2015
Equity Restricted equity Share capital 5 3 500 000 3 500 000 Total restricted equity 3 500 000 3 500 000
Retained earnings Other equity 4 4 235 905 6 188 359 Total retained earnings 4 235 905 6 188 359
Total equity 4 7 735 905 9 688 359
Liabilities Provisions Pension liabilities 10 1 463 419 297 257 Deferred tax 9 0 51 631 Total provisions 1 463 419 348 888
Current liabilities Trade creditors 902 854 996 889 Tax payable 9 0 233 790 Public duties payable 2 712 137 2 515 718 Other short term liabilities 6 12 031 356 9 360 920 Total short term liabilities 15 646 347 13 107 316
Total liabilities 17 109 766 13 456 204
Total equity and liabilities 24 845 671 23 144 563
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Statement of income
Unicare Omsorg AS
Operating income and operating expenses Note 2016 2015
Revenue 462 371 748 437 881 191 Other operating income 5 741 0 Operating Income 462 377 489 437 881 191
Raw materials and consumables used 38 497 571 37 400 454 Payroll expenses 1, 9 377 277 799 361 735 841 Depreciation and amortisation expense 3 783 152 1 102 883 Other operating expenses 1 27 854 370 26 030 214 Operating expenses 444 412 891 426 269 392
Operating profit 17 964 598 11 611 799
Financial income and expenses Interest income from group entities 8 83 390 217 070 Other interest income 6 507 72 765 Other Interest expenses -300 275 Other financial expenses 248 419 14 424 Net financial income and expenses -158 222 275 136
Operating result before tax 17 806 376 11 886 935 Tax on ordinary result 6 4 528 868 2 482 119 Operating result after tax 13 277 508 9 404 816
Annual net profit 13 277 508 9 404 816
Brought forward Group contribution 14 808 956 9 860 656 From other equity 1 531 448 455 840 Net brought forward 13 277 508 9 404 816
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Financial position
Unicare Omsorg AS
Assets Note 2016 2015
Fixed assets Deferred tax asset 6 1 572 424 1 164 973 Total intangible assets 1 572 424 1 164 973
Tangible fixed assets Machinery 4 799 14 396 Equipment and other movables 946 674 1 281 509 Total tangible fixed assets 3, 10 951 472 1 295 905
Financial fixed assets 9 1 077 343 688 195 Total financial fixed assets 1 077 343 688 195
Total fixed assets 3 601 239 3 149 073
Current assets
Debtors Accounts receivables 10 1 597 770 342 458 Other receivables 9 4 581 087 4 907 193 8 100 309 010 94 014 932 Total debtors 106 487 867 99 264 582
Cash and bank deposits 2 11 580 521 11 459 428
Total current assets 118 068 388 110 724 011
Total assets 121 669 627 113 873 083
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Statement of income
Unicare Jeløy AS Note 2016 2015 Operating income and operating expenses
Revenue 68 117 471 66 830 635 Other operating income 1 376 403 829 221 Operating income 69 493 874 67 659 856
3 004 255 3 041 792 Raw materials and consumables used Payroll expenses 1 46 873 075 40 937 230 Depreciation and amortisation expense 2 1 216 258 1 126 130 Other operating expenses 1 14 314 341 16 688 505 65 407 928 61793658 Operating expenses
Operating profit 4 085 945 5 866198
Financial income and expenses
Other interest income 170611 240 751 Other financial income 1 175 67 799 Other interest expenses 5469 583 Other financial expenses 23 366 20 125 Net financial income and expenses 142 951 287 842
4 228 896 6 154 040 Operating result before tax Tax on ordinary result 7 1075198 1 677 509 Operating result after tax 3153 698 4 476 531
Annual net profit 3153 698 4 476 531
Brought forward To other equity 3 153 698 4 476 531 Net brought forward 3153 698 4 476 531
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Financial position
Unicare Jeløy AS Assets Note 2016 2015
Fixed assets intangible Fixed assets Deferred tax asset 7 96 120 177 814 Total intangible assets 96120 177 814
Tangible fixed assets Buildings and land 2 55 412 61 267
Equipment and other movables 2 4 395 834 3 747 329 Total tangible fixed assets 4 451 246 3 808 596
Financial fixed assets Loans to group companies 6 0 5 900 000 Total financial fixed assets 0 5 900 000
Total fixed assets 4 547 366 9 886 410 Current assets
Inventories 243 274 204 237
Debtors Accounts receivables 411 419 222 920 Other receivables 163 369 466 006 Total debtors 574 788 688 926
Investments
Cash and bank deposits 3 16 085 715 14 991 055
16 903 777 15 884 218 Total current assets
Total assets 21 451 143 25 770 628
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Equity and liabilities Note 2016 2015 Restricted equity Share capital 4 2 000 000 2 000 000 Other paid-in equity 648 000 648 000 Total restricted equity 2 648 000 2 648 000
Retained earnings
Other equity 10 175 364 12 921 665
Total retained earnings 10175 364 12 921 665
Total equity 5 12 823 364 15 569 665
Current liabilities Trade creditors 381 570 829 989 Tax payable 7 993 504 1 543 832 Public duties payable 2 973 302 2 552 060 Other short term liabilities 4 279 403 5 275 082
Total short term liabilities 8 627 780 10 200 963
Total liabilities 8 627 780 10 200 963
Total equity and liabilities 21 451 143 25 770 628
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8.4 Selected unaudited financial information for the Group for 2017
8.4.1 Unicare Q1 reported figures – profit & loss:
NOK 1000 Unicare Group
Q1 2017 Q1 2016
Revenues 317 478 310 265
Costs
Cost of sales -14 499 -15 179
Salaries -221 100 -223 786
Other personnel expenses -12 805 -11 056
Other operating expenses -64 950 -59 517
Sum costs -313 354 -309 539
Depreciation -2683 -1909
EBIT 1 441 -1 182
Net financial items -986 85
EBT 455 -1 098
EBITDA 4 124 727
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8.4.2 Unicare Q2 reported figures – profit & loss:
NOK 1000 Unicare Group
Q2 2017 YTD Q2 2016
Revenues 362 337 676 321 319 525
Costs
Cost of sales -38 630 -73 310 -40 431
Salaries -224 052 -449 237 -196 645
Other personnel expenses -3 576 -10 087 -7 459
Other operating expenses -54 772 -98 424 -40 949
Sum costs -321 029 -631 058 -285 483
Depreciation -3 000 -5 673 -2 162
EBIT 38 308 39 591 -31 880
Net financial items 2 985 2 635 -550
EBT 41 292 42 226 31 331
EBITDA 41 308 45 263 34 042
8.5 Investments
8.5.1 Historical investments
Investments in 2017 include the acquisition of the companies Steffensrud Rehabiliteringssenter AS (now named Unicare Steffensrud AS) for approximately MNOK 14.5*, Jeløy Kurbad AS (now named Unicare Jeløy AS) for approximately MNOK 3.4*, Bakke, senter for mestring og rehabilitering AS for approximately MNOK 6.1* and Landaasen Rehabiliteringssenter AS for approximately MNOK 0.1*, together resulting in the acquisition of four new rehabilitation centers: Steffensrud rehabilitiation center, Jeløy rehabilitation center, Bakke rehabilitation center and Landaasen rehabilitation center. As part of the transactions certain associated properties were acquired. Such properties have been disposed of on sale-and- leaseback terms.
*The above amounts are net amounts. The revenues from the sale of the properties acquired through the abovementioned acquisitions have been deducted from the acquisition price, i.e. the acquisition price less the property sale revenues.
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8.5.2 Principal future investments
Neither the Company nor any of the Guarantors have any principal investments that are in progress or any future principal investments on which its management bodies have already made firm commitments.
9. THE COMPANY’S BOARD AND MANAGEMENT
9.1 Board of Directors
9.1.1 Overview
The Company's Board of Directors currently consists of the following persons:
Name Position Laurent Gerard Ganem Chairman Tom Erik Tidemann-Andersen Board Member Renaud Vincent Dessertenne Board Member Johan Fredrik Ehlner Svärd Board Member/CEO Unicare Holding Rolf Erik Myklebust Board Member/CFO Unicare Holding
The Company’s business address serves as c/o address in relation to the Board of Directors of all Group companies.
9.1.2 Information on the members of the Board of Directors
The Company
Laurent Gerard Ganem, Chairman Laurent founded G Square in 2007. He started his career at Baxter International in the US. In 1988, in association with a French public university he founded and managed OVI, a private company specialized in Life Science technology transfers, and consulting. In 1994, he joined Paris-based Apax Partners as Partner in charge of developing the Healthcare investment practice. He carried out numerous investments in Europe and in the US, ranging from early stage to growth and buy-outs, as well as exits (including IPOs on European and US stock markets). He was a member of the Investment Committee and the Operating Committee of Apax Partners. Laurent graduated as Medical Doctor from the University of Paris and holds an MBA from Columbia Business School (New York). He is a French citizen.
Tom Erik Tidemann-Andersen, Director Unicare Founder 2008 – Present, Director Unicare 2008 – 2016, Director and Founder Achima Helse and Achima Care AB 2001 – 2008, Director and Founder Eterna Corporate 1997 – 2001, Director and Founder Venture Invest AS 1994 – 1997. Tom Erik is a Norwegian citizen with an educational background within transport and logistics.
Renaud Vincent Dessertenne, Director Prior to joining G Square, Renaud worked two years at Lazard Frères in Paris and London as part of the French Investment Banking Team, and two years at Deutsche Bank in Paris. At both institutions, he participated in French and cross-border M&A transactions and other advisory mandates for financial investors and large European corporations. Renaud holds a Finance degree from Ecole Supérieure des Sciences Economiques et Commerciales (ESSEC) and a Master’s degree in Engineering from the Ecole Spéciale des Travaux Publics (ESTP). He is a French citizen.
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Johan Fredrik Ehlner Svärd, Director Unicare Jan 17 - Present, COO Unicare Feb 16 – Jan 17, Director Corporate HSE Posten Feb 09 – Jan 16, Director Parcels B2B, Nordic region Bring Mar 08 – Jan 09
Rolf Erik Myklebust, Director Unicare Holding AS April 17 - Present, Head of Finance Nettpartner Holding AS Sept 14 – April 17, Head of Analysis and Business Development Broadnet Dec 12 – May 14, Head of M&A and business development ISS Facility Services Oct 2005 – May 2011, Project Manager ISS Facility Services June 2011 – Dec 2012.
9.1.3 The Guarantor's board of directors
Unicare Holding AS
Tom Erik Tidemann-Andersen, Chairman Unicare Founder 2008 – Present, Director Unicare 2008 – 2016, Director and Founder Achima Helse and Achima Care AB 2001 – 2008, Director and Founder Eterna Corporate 1997 – 2001, Director and Founder Venture Invest AS 1994 – 1997.
Una Aas, Director Unicare Founder 2008 – Present, Manager Unicare BHT 2008 - 2016, COO for Norway Achima Helse AS 2003 - 2008, Sales Manager Medisinsk Vikarbyrå 2001 - 2003
Johan Fredrik Ehlner Svärd, Director Unicare Jan 17 - Present, COO Unicare Feb 16 – Jan 17, Director Corporate HSE Posten Feb 09 – Jan 16, Director Parcels B2B, Nordic region Bring Mar 08 – Jan 09
Janne Sonerud, Director Unicare Holding AS Aug 15 – Present, Deputy Director Lovisenberg Diakonale Sykehus Aug 12 – Aug 15, Departmental Manager Lovisenberg Diakonale Sykehus 2010 – 2012, Division Director for Nursing Akershus Universitetssykehus 2007 - 2010
Unicare Fram AS Unicare Friskvernklinikken AS
Name of board member Position Name of board member Position
Tom Erik Tidemann-Andersen Chairman Tom Erik Tidemann-Andersen Chairman
Johan Fredrik Ehlner Svärd Director Johan Fredrik Ehlner Svärd Director
Unicare Hokksund AS Unicare Omsorg AS
Name of board member Position Name of board member Position
Tom Erik Tidemann-Andersen Chairman Tom Erik Tidemann-Andersen Chairman
Johan Fredrik Ehlner Svärd Director Johan Fredrik Ehlner Svärd Director
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Unicare Jeløy AS
Name of board member Position
Tom Erik Tidemann-Andersen Chairman
9.2 Management
The table below sets forth the Group's current executive management:
Name Position Johan Fredrik Ehlner Svärd CEO Rolf Erik Myklebust CFO Janne Sonerud Manager of Nursing Homes Anders Olofsson Manager of Sweden Per-Anders Green Manager of Occupational health & Psychology Trine Berntsen Manager of Rehabilitation May Granly Manager of Homes & Care
The Company’s business address serves as c/o address in relation to the management of the Group. The executive management consists of the following persons:
Johan Fredrik Ehlner Svärd, CEO Unicare Jan 17 - Present, COO Unicare Feb 16 – Jan 17, Director Corporate HSE Posten Feb 09 – Jan 16, Director Parcels B2B, Nordic region Bring Mar 08 – Jan 09.
Rolf Erik Myklebust, CFO Unicare Holding AS April 17 - Present, Head of Finance Nettpartner Holding AS Sept 14 – April 17, Head of Analysis and Business Development Broadnet Dec 12 – May 14, Head of M&A and business development ISS Facility Services Oct 2005 – May 2011, Project Manager ISS Facility Services June 2011 – Dec 2012.
Janne Sonerud, Manager of Nursing Homes Unicare Holding AS Aug 15 – Present, Deputy Director Lovisenberg Diakonale Sykehus Aug 12 – Aug 15, Departmental Manager Lovisenberg Diakonale Sykehus 2010 – 2012, Division Director for Nursing Akershus Universitetssykehus 2007 – 2010.
Anders Olofsson, Manager of Sweden Unicare Sverige AB Sept 16 – Present, Director Avonova Kinnekullehalsen Vård AB May 13 – Aug 16, Sales Consultant Uphill 2005 – 2007.
Per-Anders Green, Manager of Occupational health & Psychology Unicare Psychology 2013 – Present, Regional Manager Unicare 2009 – 2013, Clinic Manager Unicare 2008 – 2013.
Trine Berntsen, Manager of Rehabilitation Unicare Holding AS Jun 17 – Present, Operation Director 4Service Oct 15 – May 17, Managing Director Norway Aviator Norge Sept 12 – Sept 15, Operation Director Compass Group Norge Sept 09 – Aug 12, Managing Director Medirest Norge AS Jan 08 – Aug 12, Managing Director Eurest Finland Aug 08 – Aug 09.
May Granly, Manager of Homes & Care Unicare Holding AS Jun 17 – Present, Assistant Director of Nursing Homes Unicare Jan 17 – Jun 17, Departmental Manager Akershus Universitetssykehus Oct 08 – Dec 16.
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9.3 Conflict of Interest etc. There are no potential conflicts of interest between any duties to the Company or the Guarantors of the members of the administrative, management of supervisory bodies, and their private interests and/or other duties.
9.4 Corporate governance As neither the Company nor any other Group company is listed on any regulated market, the Group does not adhere to the Norwegian Corporate Governance Code. None of the companies in the Group have an audit committee. 10. SHARE CAPITAL AND MAJOR SHAREHOLDERS
10.1 Share capital
The Company currently has a share capital of NOK 566,000 divided into 566,000 shares, each with a nominal value of NOK 1. The shares in the Company are equal in all respects and do not carry different voting rights. 10.2 Major shareholders
The following table sets forth information on shareholders, as of the date of the Prospectus, who will have a shareholding in the Company which is notifiable under Norwegian securities law, i.e. above 5%.
Company Name of shareholder Number of shares Percentage of shares Care Bidco AS Care Holdco AS 566,000 100%
The Company is wholly owned by Care Holdco AS, which is ultimately controlled by G Square Capital II, L.P G (GP) II LLP, the general partner of G Square Capital II L.P. There have not been taken any specific measures for preventing abuse of such control. G Square Healthcare Private Equity LLP is a Limited Liability Partnership incorporated in England and Wales (registered under No. OC385628), authorised and regulated by the Financial Conduct Authority, with registered offices at 28 Savile Row, London W1S 2EU, acting as Manager of G Square Capital II, L.P., an English Limited Partnership established in 2016 ("Investor" or the “Fund”). 10.3 Ownership of Guarantors
Guarantor Share capital Number of shares Nominal value Sole shareholder Unicare Holding AS NOK 405,555.55 8,111,111 NOK 0.05 Care Bidco AS Unicare Fram AS NOK 250,000 250 NOK 1,000 Unicare Holding AS Unicare Friskvernklinikken AS NOK 2,122,000 2,122 NOK 1,000 Unicare Holding AS Unicare Hokksund AS NOK 3,500,000 14,000 NOK 250 Unicare Holding AS Unicare Jeløy AS NOK 2,000,000 20,000 NOK 100 Unicare Holding AS Unicare Omsorg AS NOK 1,200,000 1,200 NOK 1,000 Unicare Holding AS The shares in the Guarantors are equal in all respects and do not carry different voting rights.
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11. ADDITIONAL INFORMATION
11.1 Documents on display
For twelve months from the date of this Prospectus, the following documents (or copies thereof) may be physically inspected at the principal office of the Company at Pilestredet 56, 0167, Oslo, Norway (telephone number +47 23 29 21 00): The Company’s and the Guarantors' Memorandum and Articles of Association The Company’s audited 2016 consolidated annual accounts, including the auditor’s report The audited 2016 and 2015 annual accounts for the Guarantors, including the auditor’s reports The unaudited Q1 and Q2 2017 financial reports for the Group The Guarantee made by the Guarantors in favour of the Bond Trustee
11.2 Statement regarding sources
This Prospectus contains information sourced from third parties, including without limitation, market data, industry forecasts and other information published by third parties. The Company confirms that when information in this Prospectus has been sourced from a third party it has been accurately reproduced and as far as the Company is aware and is able to ascertain from the information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Where information sourced from third parties has been presented, the source of such information has been identified.
The following publications have been cited in this Prospectus:
Publisher/ Title Publishing URL Date cited Payable/Free Author date NHO Statistikk og Trender 20.10.2016 https://www.nhos 08.09.2017 Free Service 2016/17 ervice.no/publikas joner/mappepubli kasjoner/nyheter/ 2016/statistikk-og- trender-201617/
Ny Analyse Effekten av 14.12.2016 https://www.nhos 08.09.2017 Free on behalf konkurranse - Kvalitet ervice.no/publikas of NHO og kostnader ved joner/mappepubli Service sykehjem i Oslo 2016 kasjoner/dokume nter/kvalitet-og- kostnader-ved- sykehjem-i-oslo/
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12. DEFINITIONS AND GLOSSARY OF TERMS
12.1 Definitions
In the Prospectus, the following definitions have the meanings indicated below.
Board or Board of Directors ...... The Board of Directors of the Company
Bonds or Bond Issue ...... The bond loan issued by the Company in a NOK 700 million senior secured bond issue with maturity in March 2021 Bond Agreement ...... The bond agreement for the Bonds, attached as Appendix 1
Bondholders' meeting ...... The supreme authority of the bondholders community in all matters relating to the Bonds
Business Day ...... Any day on which both the relevant CSD settlement system is open, and the relevant Bond currency settlement system is open CET ...... Central European Time
Company ...... Care Bidco AS, a private limited liability company duly incorporated under the laws of Norway, having its registered office at Pilestredet 56, 0167 Oslo, Norway
CSD ...... The central securities depository in which the Bonds are registered, being Verdipapirsentralen ASA
EBITDA ...... Earnings Before Interest, Taxes, Depreciation and Amortization
EEA ...... European Economic Area
EU ...... European Union
EUR ...... Euro, the lawful currency currently shared by 16 of the European Union’s member states
Forward-looking statements ...... Statements relating to, without limitation, projections and expectations regarding the Group’s future financial position, business strategy, plans and objectives
FSA ...... The Financial Supervisory Authority
Group ...... The Company and its consolidated subsidiaries
Group Company ...... Each company being part of the Group
Guarantors ...... Unicare Holding AS, Unicare Fram AS, Unicare Friskvernklinikken AS, Unicare Hokksund AS, Unicare Jeløy AS and Unicare Omsorg AS
HSE ...... Health, safety and environment
Listing ...... Listing of the Bonds on Oslo Børs
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Manager ...... ABG Sundal Collier
Material Group Company ...... (i) The Company, (ii) any directly and wholly owned Subsidiary of the Company and (iii) any other member of the Group which has subsequently been designated as a Material Group Company by the Company pursuant to Clause 13.12 (Designation of Material Group Companies) of the Bond Agreement
NOK ...... Norwegian kroner, the lawful currency of Norway
Norwegian Private Limited Companies Act Norwegian Act no. 44 of June 13, 1997 on public ...... limited liability companies
Norwegian Securities Trading Act ...... Norwegian Act no. 75 of June 29, 2007 on securities trading
Oslo Børs ...... The Oslo Stock Exchange
This prospectus, dated as stated herein Prospectus ......
Directive 2003/71/EC Prospectus Directive ......
Helse Sør-Øst, Helse Vest, Helse Midt-Norge and RHA/Regional Health Authorities ...... Helse Nord
Regulation S ...... Regulation S under the U.S. Securities Act
Repayment Date ...... Any date for payment of principal or any other amounts under the Bond Issue in accordance with Clause 10.1 of the Bond Agreement (Redemption of Bonds), any Call Option Repayment Date, the Default Repayment Date, the Put Option Repayment Date, the Tax Event Repayment Date, the Longstop Date or the Maturity Date (each as defined in the Bond Agreement)
Relevant Member State ...... A Member State of the EEA other than Norway, which has implemented the Prospectus Directive
Stamdata ...... www.stamdata.com
Subsidiary ...... A company over which the Company has Decisive Influence
UK ...... United Kingdom
Unicare ...... The Group
U.S. Securities Act...... The United States Securities Act of 1933, as amended VPS ...... VPS Holding ASA (the Norwegian Central Securities Depository) Biskop Gunnerus gate 14 A, P.O. box 4, N-0051 Oslo, Norway
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Registered Office
Care Bidco AS
Pilestredet 56
0167 Oslo, Norway
Manager ABG Sundal Collier Vika Atrium Munkedamsveien 45 0250 Oslo, Norway Middelthunsgate 17, 0368 Oslo
Legal Advisor to the Company Advokatfirmaet Schjødt AS Ruseløkkveien 14 P.O. Box 2444 Solli N-0201 Oslo, Norway
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Appendix 1
Execttion version
BOND TERMS Í'oR
Care Bidco AS
FRN Senior Secured Bonds 20l7l2Ù2l rsrN No 0010788961 Contents
Clause Page
a 1. INTERPRETATION ..J ) THE BONDS ...... 16 a J...... I 8 4. ADMISSION TO LISTING ...... l9 5. REGISTRATION OF THE BONDS ...19 6. CONDITIONS FOR DISBURSEMEN1 ...... 19 7. REPRESENTATIONS AND V/ARRANTIES .22 8. PAYMENTS IN RESPECT OF THE BONDS .24 9. INTEREST .26 10. REDEMPTION AND REPURCHASE OF 8ONDS...... 27 ll. PURCHASE AND TRANSFER OF BONDS.... .28 12. INFORMATION I.]NDERTAKINGS .29 13. GENERAL AND FINANCIAL I-]NDERTAKINGS .30 14. EVENTS OF DEFAULT AND ACCELERATION OF THE BONDS ...34 15. BONDHOLDERS' DECISIONS ...... 37 16. THE BOND TRUSTEE...... 41 t7. AMENDMENTS AND WAIVERS .46 18. MISCELLANEOUS .46 19. GOVERNING LAW AND JURISDICTION...... 49
SCHEDULE I COMPLIANCE CERTIFICATE SCHEDULE 2 RELEASE NOTICE _ ESCROW ACCOUNT SCHEDULE 3 SECURITY PRINCIPLES
2 (52) BOI\D TERMS
ISSUER: Care Bidco AS, a company existing under the laws of Norway with registration number 916 544 669; and
BOND TRUSTEE: Nordic Trustee ASA, a company existing under the laws of Norway with registration number 963 342 624.
DATED: 22March20l7
These Bond Terms shall remain in effect for so long as any Bonds remain outstanding.
1. INTERPRETATION
1.1 Defïnitions
The following terms will have the following meanings:
"Additional Bonds" means Bonds issued under a Tap Issue.
"AfÏiliate" means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purpose of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Annual Financial Statements" means the audited unconsolidated and consolidated annual financial statements of the Issuer for any financial year, prepared in accordance with GAAP, such financial statements to include a profit and loss account, balance sheet, cash flow statement and report of the board of directors.
"Attachmenf'means each of the attachments to these Bond Terms.
"Bond Terms" means these terms and conditions, including all Attachments hereto which shall form an integrated part of the Bond Terms, in each case as amended and/or supplemented from time to time.
"Bond Trustee" means the company designated as such in the preamble to these Bond Terms, or any successor, acting for and on behalf of the Bondholders in accordance with these Bond Terms.
"Bond Trustee Agreement" means the agreement entered into between the Issuer and the Bond Trustee relating among other things to the fees to be paid by the Issuer to the Bond Trustee for its obligations relating to the Bonds.
"Bondholder" means a Person who is registered in the CSD as directly registered owner or nominee holder of a Bond, subject however to Clause 3.3 (Bondholders' rights).
"Bondholders' Meeting" means a meeting of Bondholders as set out in Clause 15 (B ondholders' de c is ions).
3 (s2) 'oBonds" means the debt instruments issued by the Issuer pursuant to these Bond Terms, including any Additional Bonds.
"Business Day" means a day on which both the relevant CSD settlement system is open, and the relevant Bond currency settlement system is open.
"Business Day Convention" means that if the last day of any Interest Period originally falls on a day that is not a Business Day, the Interest Period will be extended to include the first following Business Day unless that day falls in the next calendar month, in which case the Interest Period will be shortened to the first preceding Business Day (ModiJìed Following).
"Call Option" has the meaning given to it in Clause 10.2 (Voluntary Redemption - Call Option).
"Call Option Repayment l)ate" means the settlement date for the Call Option determined by the Issuer pursuant to Clause 10.2 (Voluntary early redemption - Call Option), or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds.
"Cash" means at any time (a) freely available and unrestricted cash in hand or at bank and (in the latter case) credited to an account in the name of a member of the Group, and (b) certificates of deposits of marketable debt securities of minimum investment grade rating held for cash management purposes.
"Change of Control Event" means any Person or group of Persons acting in concert gaining Decisive lnfluence over the Issuer (other than the Sponsor or any fund managed by the Sponsor and/or any otherparty overwhom any ofthem have Decisive Influence).
"Compliance Certificate" means a statement substantially in the form as set out in Attachment t hereto.
*CSD" means the central securities depository in which the Bonds are registered, being Verdipapirsentralen ASA.
"I)ecisive Influence" means a Person having, as a result of an agreement, understanding and/or other arrangement and/or through the direct and/or indirect ownership of shares and/or other ownership interests in another Person:
(a) a majority of the voting rights in that other Person; or
(b) a right to elect or remove a majority of the members of the board of directors of that other Person.
"I)efault Notice" means a written notice to the Issuer as described in Clause 14.2 (Acceleration of the Bonds).
"I)efault Repayment l)ate" means the settlement date set out by the Bond Trustee in a Default Notice requesting early redemption of the Bonds.
4 (s2) "Distribution" means any (Ð payment of dividend on shares, (ii) repurchase of own shares, (iii) redemption of share capital or other restricted equity with repayment to shareholders, (iv) repayment of any Subordinated Capital, or (v) any other similar distribution or transfers of value to the direct and indirect shareholders of any Group Company or the Affrliates of such direct and indirect shareholders.
*EBITDA" means the consolidated profit of the Group, from ordinary activities according to the latest Financial Report(s):
(a) before deducting any amount of tax on profits, gains or income paid or payable by any member of the Group;
(b) before deducting any Net Finance Charges;
(c) excluding any items (positive or negative) of a one off, non-recurring, non- operational, extraordinary, unusual or exceptional nature (including, without limitation, restructuring expenditures);
(d) before taking into account any unrealised gains or losses on any derivative instrument (other than any derivative instruments which are accounted for on a hedge account basis);
(e) after adding back the amount of any accounting effect of stock based compensation for employees;
(Ð after adding back or deducting, as the case may be, the amount of any material loss or gain against book value arising on a disposal ofany asset (other than in the ordinary course of trading) and any loss or gain arising from an upward or downward revaluation of any asset;
(g) after deducting the amount of any profit (or adding back the amount of any loss) of any member of the Group which is attributable to minorþ interests;
(h) after adding back or deducting, as the case may be, the Group's share of the profits or losses of entities which are not part of the Group;
(i) after adding back any losses to the extent covered by any insurance; and C) after adding back any amount attributable to the amortisation, depreciation or depletion of assets of members of the Group.
oo[scrow Account" means an account in the name of the Issuer, with an acceptable bank located in Norway, pledged and blocked on first priority as security for the Issuer's obligations under the Finance Documents in favour of the Bond Trustee (on behalf of the Bondholders), where the bank operating the account has waived any set-off rights.
'oBscrow Account Pledge" means the pledge over the Escrow Account, where the bank operating the account has waived any set-off rights.
5 (s2) 'oEvent of Default" means any of the events or circumstances specified in Clause 14.1 (Events of Default). o'Exchange" means:
(a) the Oslo Stock Exchange (No: Oslo Børs); or
(b) any regulated market as such term is understood in accordance with the Markets in Financial Instruments Directive (Directive 2004/39lF;C) or the Markets in Financial Instruments Directive 20l4l65tÛU (MiFID II), as applicable.
"Existing l)ebt" means:
(a) the loan agreement between Unicare Holding AS as borrower and Danske Bank A/S as lender in the amount of approximately NOK 85,600,000; and
(b) the loan agreement between Care Bidco AS as borrower and the Sponsor as lender in the amount of approximately NOK I 5 1,800,000.
"Finance I)ocuments" means these Bond Terms, the Bond Trustee Agreement, any Transaction Security Document, and any other document designated by the Issuer and the Bond Trustee as a Finance Document.
"Finance Charges" means, for the Relevant Period, the aggregate amount of the accrued interest, commission, fees (excluding arrangement fees in respect of the Initial Loan Amount under the Bond Issue), discounts, payment fees, premiums or charges and other finance payments in respect of Financial Indebtedness whether paid, payable or capitalised by any member of the Group (calculated on a consolidated basis), without taking into account any capitalised interest in respect of any Subordinated Capital, or any unrealised gains or losses on any derivative instruments other than any derivative instruments which are accounted for on a hedge accounting basis
"Financial Indebtedness" means any indebtedness for or in respect of:
(a) moneys borrowed and debt balances at banks or other financial institutions;
(b) any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue ofbonds, notes, debentures, loan stock or any similar instrument, including the Bonds;
(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP as applicable on the Issue Date, be treated as a finance or capital lease (meaning that the lease is capiølized as an asset and booked as a coresponding liability in the balance sheet);
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis provided that the requirements for de-recognition under GAAP are met);
6 (s2) (Ð any derivative transaction entered into and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount shall be taken into account);
(g) any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of a person which is not a Group Company which liability would fall within one of the other paragraphs of this definition;
(h) any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the Issuer) before the Maturþ Date or are otherwise classified as borrowings under GAAP;
(Ð any amount of any liabilþ under an advance or deferred purchase agreement, if (a) the primary reason behind entering into the agreement is to raise finance or (b) the agreement is in respect of the supply of assets or services and payment is due more than 120 calendar days after the date of supply;
0) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing or otherwise being classified as a borrowing under GAAP; and
(k) without double counting, the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (i) above.
"Financial Reports" means the Annual Financial Statements and the Interim Accounts.
"First Call Date" means the Interest Payment Date in IN{.atch2020.
.'GAAP" means generally accepted accounting practices and principles in Norway including, if applicable, International Financial Reporting Standards (IFRS) and guidelines and interpretations issued by the International Accounting Standards Board (or any predecessor and successor thereof), in force from time to time. o'Government Bond Rate" means the yield to maturity at the time of computation of direct obligations of the Norwegian Government with a constant maturity (as officially compiled and published in the most recent financial statistics that have become publicly available at least two (2) Business Days (but not more than five (5) Business Days) prior to the redemption date (or, if such financial statistics are not so published or available, any publicly available source of similar market data selected by the Issuer in good faith) most nearly equal to the period from the relevant redemption date to (but excluding) the First Call Date, provided, however that if the period from the relevant redemption date to (but excluding) the First Call Date is not equal to the constant maturity of the direct obligations of the Norwegian Government for which a weekly average yield is given, the Norwegian Government Bond Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of direct obligations of the Norwegian Government for which such yields are given, except that if the period from such redemption date to (but excluding) the First Call Date is less than one year, the weekly average yield on actually traded direct
7 (s2) obligations of the Norwegian Government adjusted to a constant maturity of one year shall be used.
"Group" means the Issuer and all its Subsidiaries from time to time
"Group Company" means any Person which is a member of the Group
"Guarantee" shall have the meaning ascribed to such term in Clause 2.5(aXiii).
"Guarantors" means all appointed Material Group Companies (from time to time), and always including (i) Unicare Holding AS, a company incorporated in Norway with registration number 995 986 973 and (ii) the Issuer's wholly and directly owned Subsidiaries (each a "Guarantor").
"Incurrence Test" shall have the meaning ascribed to such term in Clause 13.ll (Incurrence Test).
"Initial Bond fssue" means the aggregate Nominal Amount of all Bonds issued on the Issue Date.
"Initial Nominal Amount" means the nominal amount of each Bond as set out in Clause 2.1 (Amount, denomination and ISIN of the Bonds).
"Insolvent" means that a Person:
(a) is unable or admits inability to pay its debts as they fall due;
(b) suspends making payments on any of its debts generally; or
(c) is otherwise considered insolvent or bankrupt within the meaning of the relevant bankruptcy legislation of the jurisdiction which can be regarded as its center of main interest as such term is understood pursuant to Council Regulation (EC) no. 134612000 on insolvency proceedings (as amended).
"Intellectual Property" means any patents, trademarks, service marks, designs, business names, copyrights, database rights, rights to source code, design rights, domain names, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered and the benefit of all applications and rights to use such assets of each member of the Group.
"Intercompany Loan" means any loan made by a Group Company to a Material Group Company (not including any Financial Indebtedness under any cash pooling arrangement of the Group) where (i) the term of the loan is over one year (the term being determined at the sole discretion of the Issuer) and (ii) the amount is in excess of NOK 20,000,000 and which pursuant to the Bond Terms shall be fully subordinated to the Secured Obligations.
o'Interest Cover Ratio" means the ratio of EBITDA to Net Finance Charges calculated for the Relevant Period.
I (52) "Interest Payment I)ate" means the last day of each Interest Period, the first Interest Payment Date being 24 June 2017 and the last Interest Payment Date being the Maturity Date.
"Interest Period" means, subject to adjustment in accordance with the Business Day Convention, the period between 24 June,24 September,24 December and 24 March each year, provided however that an Interest Period shall not extend beyond the Maturity Date.
"Interest Quotation I)ay" means, in relation to any period for which Interest Rate is to be determined, the day falling two (2) Business Days before the first day of the relevant Interest Period. oolnterest Rate" means the percentage rate per annum which is the aggregate of the Reference Rate for the relevant Interest Period plus the Margin.
"Interim Accounts" means the unaudited consolidated quarterly financial statements of the Issuer for the quarterþ period ending on each 3l March,30 June, 30 September and 31 December in each year, prepared in accordance with GAAP. *ISIN' means International Securities Identification Number - the identification number of the Bonds.
"Issue Date" means 24March2017.
"Issuer" means the company designated as such in the preamble to these Bond Terms.
"Issuer's Bonds" means any Bonds which are owned by the Issuer or any Affiliate of the Issuer.
"Leverage Ratio" means the ratio of Net Interest Bearing Debt to EBITDA calculated for the Relevant Period.
"Listing Failure Event" means:
(a) that the Bonds have not been admitted to listing on an Exchange within six (6) months following the Issue Date, or
(b) in the case of a successful admission to listing, that a period of six (6) months has elapsed since the Bonds ceased to be admitted to listing on an Exchange.
"Longstop Date" means the date that falls sixty (60) Business Days after the Issue Date.
"Make-Whole Amounf'means an amount equal to the sum of:
(a) the present value on the Call Option Repayment Date of 102 per cent. of the Nominal Amount as if such payment had taken place on the First Call Date; and
(a) the present value on the Call Option Repayment Date of the remaining interest payments (less any accrued and unpaid interest as of the Call Option Repayment Date) to and including the First Call Date,
9 (s2\ where the present value shall be calculated by using a discount rate of 50 basis points above the comparable Govemment Bond Rate (i.e. comparable to the remaining duration until the First Call Date using linear interpolation), and where the interest rate applied for the remaining interest payments shall equal the Mid-Swap Rate plus the Margin (however so that the interest rate can never fall below the Margin).
"Manager" means ABG Sundal Collier ASA, who act as manager for the Bond Issue.
"Margin" means 5.50 per cent.
"Material Adverse Effect" means a material adverse effect on:
(a) the Issuer's or any Guarantor's ability to perform and comply with its obligations under any of the Finance Documents, or
(b) the validity or enforceability of any of the Finance Documents.
"Material Group Company" means (i) the Issuer, (ii) any directly and wholly owned Subsidiary of the Issuer and (iii) any other member of the Group which has subsequently been designated as a Material Group Company by the Issuer pursuant to Clause 13.10 (Designation of Material Group Companies).
"Maturity l)ate" means 24March202l, adjusted according to the Business Day Convention.
o'Maximum Issue Amount" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination, ISIN and tenor).
"Mid-Swap Rate" means the linearly interpolated Reference Rate in the currency of the Bonds for the actual period on the day of computation of the Government Bond Rate, or, if such is not quoted, the mid-swap rate for the leading banks in the relevant interbank market, based on the last quoted Reference Rate or mid-swap rate in the currency of the Bonds for the actual period.
o'Net Finance Charges" means, for the Relevant Period, the Finance Charges according to the latest Financial Report(s), after deducting any interest payable for that Relevant Period to any member of the Group and any interest income relating to cash or cash equivalent investment (and excluding any payment-in-kind interest capitalised on Subordinated Capital).
"Net Interest Bearing l)ebt" means the aggregate interest bearing Financial Indebtedness of the Group, and excluding:
(a) SubordinatedCapital;
(b) interest bearing debt borrowed from a wholly-owned Group Company to another wholly-owned Group Company; and
(c) any Issuer's Bonds,
less cash and cash equivalents (and for the avoidance of doubt funds held on the Escrow Account of the Group in accordance with IFRS).
r0 (52) "Nominal Amount" means the Initial Nominal Amount less the aggregate amount by which the Bonds (or each Bond, if applicable) have been partially redeemed pursuant to Clause l0 (Redemption and repurchase of Bonds).
"Obligor" means the Issuer and any Guarantors.
"Outstanding Bonds" means any Bonds issued in accordance with these Bond Terms to the extent not redeemed or otherwise discharged.
"Overdue Amount" means any amount required to be paid by the Issuer under any of the Finance Documents but not made available to the Bondholders on the relevant Payment Date or otherwise not paid on its applicable due date.
"Parent" means Care Holdco AS, a private limited liability company incorporated in Norway with registration number.916 544 626).
"Paying Agent" means the legal entity appointed by the Issuer to act as its paying agent with respect to the Bonds in the CSD.
"Payment Date" means any Interest Payment Date or any Repayment Date.
"Permitted Distribution" means any Distribution by:
(a) a Subsidiary of the Issuer, if such Distribution is made to another Group Company and, if made by a Group Company which is not wholly-owned, is made on a pro rata basis; and
(b) by the Issuer to the Parent or its Affiliates for funding, payment or reimbursement of administration cost and services limited to NOK 1,000,000 for any financial year, provided that no Event of Default is continuing or would result from such Distribution.
"Permitted Financial Indebtedness" means any Financial Indebtedness (or the refinancing of any Financial Indebtedness outstanding at the time of the refinancing):
(a) under the Finance Documents;
(b) incurred under Existing Debt (provided it shall be included as "Permitted Financial Indebtedness" only up until the fîrst release of funds from the Escrow Account);
(c) incurred under finance or capital lease of equipment, computers or real property in the ordinary course of business;
(d) in the form of any Intercompany Loans;
(e) any loans between Group Companies (other than to the Issuer) that do not constitute Intercompany Loans;
(Ð in the form of any Subordinated Capital;
(g) arising between Group Companies under any cash pooling arrangement of the Group;
ll (s2) (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability in the ordinary course of business of a Group Company;
(D incurred under any advance or deferred purchase agreement on normal commercial terms by any member of the Group from any of its trading parhrers in the ordinary course of its trading activities;
û) incurred by the Issuer, if such Financial Indebtedness meets the Incurrence Test tested pro forma including such new Financial Indebtedness, and is incurred as a result of a Tap Issue;
(k) incurred as a result of any Group Company acquiring another entity (or operations) and which is due to such acquired entity holding indebtedness, provided that such indebtedness is either (i) repaid, or (ii) otherwise refinanced by the Issuer as set out in paragraph O above within ninety (90) days of completion of such acquisition or transfer;
(l) under any pension and tax liabilities incurred in the ordinary course of business; or
(m) incurred under paragraph (h) of the definition of "Permitted Financial Support".
"Permitted Financial Support" means any guarantee, loan or other financial support:
(a) granted under the Finance Documents;
(b) granted under Existing Debt (provided it shall be included as "Permitted Financial Support" only up until the first release of funds from the Escrow Account);
(c) granted in respect ofany Tap Issue, provided that such guarantee is granted in favour of the Bond Trustee on behalf of the Bondholders in accordance with the Bond Terms;
(d) permitted under paragraphs (d), (e) and (g) of the definition of "Permitted Financial Indebtedness";
(e) which constitutes a trade credit or guarantee issued in respect of a liability incuned by another Group Company in the ordinary course of business;
(Ð for any rental obligations in respect of any real property leased by a Group Company in the ordinary course of business and on normal commercial terms;
(g) arising by operation oflaw and in the ordinary course ofbusiness and not as a result of any default or omission; or
(h) arising in the ordinary course of banking arrangements for the purposes of netting debt and credit balances between Group Companies.
t2 (s2) "Permitted Securit¡r" means any security:
(a) created under the Finance Documents;
(b) created in respect of Existing Debt (provided it shall be included as "Permitted Security" only up until the first release of funds from the Escrow Account);
(c) created in respect of a Tap Issue, provided that such security is granted in favour of the Bond Trustee on behalf of the Bondholders in accordance with the Bond Terms;
(d) arising by operation oflaw or in the ordinary course oftrading and not as a result of any default or omission;
(e) arising in the ordinary course of banking arrangements for the purposes of netting debt and credit balances of the Group Companies;
(Ð in the form of rental deposits or other guarantees in respect of any lease agreement including in relation to real property entered into by a Group Company in the ordinary course of business and on normal commercial terms; or
(g) granted under Permitted Financial Indebtedness in accordance with paragraph (k) of the definition of "Permitted Financial Indebtedness" and that such security is discharged upon repayment or refinancing of such Financial Indebtedness with the Issuer as the new borrower.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organisation, government, or any agency or political subdivision thereof, or any other entity, whether or not having a separate legal personality.
"Pre-I)isbursement Security" means the Security designated as such in Clause 2.5.
"Pre-settlement SecuritSr" means the Security designated as such in Clause 2.5.
"Put Option" shall have the meaning ascribed to such term in Clause 10.3 (Mandatory repurchase due to a Put Option Event).
"Put Option Event" means a Change of Control Event.
"Put Option Repayment I)ate" means the settlement date for the Put Option Event pursuant to Clause 10.3 (Mandatory repurchase due to a Put Option Event).
ooReference Rate" shall mean NIBOR; (Norwegian Interbank Offered Rate) being the interest rate fixed for a period comparable to the relevant Interest Period on Oslo Børs' webpage at approximately 12.15 (Oslo time) on the Interest Quotation Day or, on days on which Oslo Børs has shorter opening hours (New Year's Eve and the Wednesday before Maundy Thursday), the data published at approximately 10.15 a.m. (Oslo time) on the Interest Quotation Day shall be used. In the event that such page is not available, has been removed or changed such that the quoted interest rate no longer represents, in the opinion of the Bond Trustee, a correct expression of the relevant interest rate, an alternative page or
t3 (s2) other electronic source which in the opinion of the Bond Trustee and the Issuer gives the same interest rate shall be used. If this is not possible, the Bond Trustee shall calculate the relevant interest rate based on comparable quotes from major banks in Oslo. If any such rate is below zero, NIBOR will be deemed to be zero.
"Relevant Jurisdiction" means the country in which the Bonds are issued, being Norway.
"Relevant Period" means each period of twelve (12) consecutive calendar months.
"Relevant Record l)ate" means the date on which a Bondholder's ownership of Bonds shall be recorded in the CSD as follows:
(a) in relation to payments pursuant to these Bond Terms, the date designated as the Relevant Record Date in accordance with the rules of the CSD from time to time;
(b) for the purpose of casting a vote in a Bondholders' Meeting, the date falling on the immediate preceding Business Day to the date of that Bondholders' Meeting being held, or another date as accepted by the Bond Trustee; and
(c) for the purpose of casting a vote in a Written Resolution
(Ð the date falling three (3) Business Days after the Summons have been published; of,
(iÐ if the requisite majority in the opinion of the Bond Trustee has been reached prior to the date set out in paragraph (i) above, on the date falling on the immediate Business Day prior to the date on which the Bond Trustee declares that the Written Resolution has been passed with the requisite majority.
"Repayment I)ate" means any date for payment of principal or any other amounts under the Bond Issue in accordance with Clause l0.l (Redemption of Bonds), any Call Option Repayment Date, the Default Repayment Date, the Put Option Repayment Date, the Tax Event Repayment Date, the Longstop Date or the Maturþ Date.
"secured Obligations" means all present and future obligations and liabilities of the Issuer under the Finance Documents.
"secured Parties" means the Security Agent and the Bond Trustee on behalf of itself and the Bondholders.
"securities Trading Act" means the Securities Trading Act of 2007 no.75 of the Relevant Jurisdiction.
"securit¡/" means a mortgage, charge, pledge, lien, security assignment or other security interest securing any obligation of any Person or any other agreement or afrangement having a similar effect.
"security Principles" means such principles and agreed limitations in respect of the granting of Security as set out in Schedule 3 to these Bond Terms.
t4 (s2) "security Agent" means the Bond Trustee or any successor Securþ Agent, acting for and on behalf of the Secured Parties in accordance with any Security Agent Agreement or any other Finance Document.
"security Agent Agreement" means any agreement whereby the Security Agent is appointed to act as such in the interest of the Bond Trustee (on behalf of itself and the Bondholders).
'osponsor" means Gsquare Healthcare Private Equity LLP.
"subordinated Capital" means any loan granted or to be granted, with terms (including aggregate amount) and final structure acceptable to the Bond Trustee (acting in its sole discretion), inter alia to ensure that (a) such loan is fully subordinated to the Secured Obligations, (b) no interest shall accrue and be payable in excess of any interest payable under the Bonds and always be subject to payment in-kind (PIK), and (c) any repayment of principal, or payment of interest under any such loan, is subject to all present and future obligations and liabilities under the Secured Obligations having been discharged in full.
"Subsidiary" means a company over which another company has Decisive Influence.
oosummons" means the call for a Bondholders' Meeting or a Written Resolution as the case may be.
"Tap Issue" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination, ISIN and tenor).
"Tap Issue Addendum" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination, ISIN and tenor).
"Tax Event Repayment l)ate" means the date set out in a notice from the Issuer to the Bondholders pursuant to Clause I0.4 (Early redemption option due to a tax event).
"Transaction Security" means the Securþ created or expressed to be created in favour of the Security Agent (on behalf of the Secured Parties) pursuant to the Transaction Securþ Documents.
"Transaction Security l)ocuments" means, collectively, the Escrow Account Pledge and all of the documents which shall be executed or delivered pursuant to Clause 2.5 (Transaction Security) expressed to create any Security by the relevant grantor thereof in respect of the Issuer's obligations under any of the Finance Documents.
"Voting Bonds" means the Outstanding Bonds less the Issuer's Bonds and a Voting Bond shall mean any single one of those Bonds.
"Written Resolution" means a written (or electronic) solution for a decision making among the Bondholders, as set out in Clause 15.5 (Written Resolutions).
1.2 Construction In these Bond Terms, unless the context otherwise requires:
l5 (s2) (a) headings are for ease ofreference only;
(b) words denoting the singular number will include the plural and vice versa;
(c) references to Clauses are references to the Clauses of these Bond Terms;
(d) references to a time are references to Central European time unless otherwise stated;
(e) references to a provision of "law" is a reference to that provision as amended or re- enacted, and to any regulations made by the appropriate authority pursuant to such law;
(Ð references to a "regulation" includes any regulation, rule, official directive, request or guideline by any official body;
(g) references to a "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, unincorporated organization, government, or any agency or political subdivision thereof or any other entþ, whether or not having a separate legal Personality;
(h) references to Bonds being "redeemed" means that such Bonds are cancelled and discharged in the CSD in a corresponding amount, and that any amounts so redeemed may not be subsequently re-issued under these Bond Terms;
(i) references to Bonds being "purchased" or 'orepurchased" by the Issuer means that such Bonds may be dealt with by the Issuer as set out in Clause 11.1. (Issuer's purchase of Bonds);
û) references to Persons "acting in concert" shall be interpreted pursuant to the relevant provisions of the Securities Trading Act; and
(k) an Event of Default is "continuing" if it has not been remedied or waived.
2. THE BOIU)S 2.t Amount, denomination and ISIN of the Bonds (a) The Issuer has resolved to issue a series of Bonds in in the maximum amount of NOK 700,000,000 (the "Maximum Issue Amount"). The Bonds may be issued on different issue dates and the Initial Bond Issue will be in the amount of NOK 350,000,000. The Issuer may, provided that the conditions set out in Clause 6.3 (Tap Issues) are met, at one or more occasions issue Additional Bonds (each a "Tap Issue") until the Nominal Amount of all Additional Bonds equals in aggregate the Maximum lssue Amount less the Initial Bond Issue. Each Tap Issue will be subject to identical terms as the Bonds issued pursuant to the Initial Bond Issue in all respects as set out in these Bond Terms, except that Additional Bonds may be issued at a different price than for the Initial Bond Issue and which may be below or above the Nominal Amount. The Bond Trustee shall prepare an addendum to these Bond Terms evidencing the terms of each Tap Issue (a "Tap Issue Addendum").
(b) The Bonds are denominated in Norwegian Kroner (NOK), being the legal currency of Norway.
t6 (s2) (c) The Initial Nominal Amount of each Bond is NOK 500,000.
(d) The ISIN of the Bonds is NO 001 0788961. All Bonds issued under the same ISIN will have identical terms and conditions as set out in these Bond Terms'
2.2 Tenor ofthe Bonds The tenor of the Bonds is from and including the Issue Date to but excluding the Maturity Date.
2.3 Use of proceeds (a) The Issuer will use the net proceeds from the Initial Bond Issue (net of fees and legal cost of the Manager and the Bond Trustee and any other cost and expenses incurred in connection with the Bond Issue) exclusively (i) for repayment of Existing Debt and (ii) general corporate purposes, including acquisitions.
(b) The Issuer will use the net proceeds from the issuance of any Additional Bonds for general corporate purposes, including acquisitions.
2.4 Status ofthe Bonds The Bonds will constitute senior debt obligations of the Issuer. The Bonds will rank pari passu between themselves and will rank at least pari passu with all other obligations of the Issuer (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application).
2.5 Transaction Security (a) As Security for the due and punctual fulfilment of the Secured Obligations, the Issuer shall procure that the following Transaction Security is granted in favour of the Security Agent (on behalf of the Bondholders), as further stated in Clause 6 (C ond it ion s for dis bur s ement):
Pre-Settlement Securitv:
(D first priority pledge over the Escrow Account;
Pre-Disbursement Security:
(Ð first priority charges over the Issuer's bank accounts (to be unblocked except upon the occurrence of an Event of Default which is continuing and following the Bond Trustee's written notice to the relevant account bank);
(ii) first priority pledge over all shares issued in the Issuer and all of the Guarantors;
(iiÐ to the extent legally and practically possible, joint and several unconditional and irrevocable Norwegian law guarantees (No. "selvskyldnerkausjon"), or the corresponding guarantee under other applicable law to the extent made by a Guarantor which is not a Norwegian legal entity, from each of the Guarantors, which shall constitute senior obligations of the Guarantors (the "Guarantees");
t7 (s2) (iv) first priority floating charges in operational assets (No: Driftstilbehørspant) of each Guarantor incorporated in Norway and the Issuer;
(v) first priority floating charges in the account receivables (No: Factoringpant) of each Guarantor incorporated in Norway and the Issuer; and
(vi) first priority pledge in any Intercompany Loans from the Issuer to the Guarantors (if any in existence).
(b) The Transaction Security shall be entered into on such terms and conditions as the Bond Trustee in its discretion deems appropriate in order to create the intended benefit for the Secured Parties under the relevant document and always be subject to and limited to mandatory provisions of applicable law which limit the legal capacity or ability to provide Security, including but not limited to, the provisions of section 8-7 and 8-10 of the Norwegian Limited Liabilþ Companies Act and the Norwegian Public Limited Liabilþ Companies Act, both of 1997 (as amended) and (to the extent relevant) any similar restrictions in other jurisdictions in which a Guarantor is incorporated from time to time.
(c) The Issuer shall for as long as any amount remain outstanding under the Bonds ensure that all shares issued by its directly owned Subsidiaries are pledged on first priority in favour of the of the Bond Trustee (on behalf of the Bondholders).
(d) The Bond Trustee shall pursuant to these Bond Terms (upon the Issuer's request) release any Guarantee or Security provided by a Guarantor that ceases to be a Material Group Company unless an Event of Default has occurred and is continuing.
3 THE BONDHOLDERS
3.1 Bond Terms binding on all Bondholders (a) Upon registration of the Bonds in the CSD, the Bondholders shall be bound by the terms and conditions of these Bond Terms and any other Finance Document without any further action or formality being required to be taken or satisfied.
(b) The Bond Trustee is always acting with binding effect on behalf of all the Bondholders.
3.2 Limitation of rights of action (a) No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other action against the Issuer or any other party in relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance Documents, other than through the Bond Trustee and in accordance with these Bond Terms, provided, however, that the Bondholders shall not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put Option.
(b) Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such documents, including a written power of attorney (in form and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising its rights and/or carrying out its duties under the Finance
18 (52) Documents. The Bond Trustee is under no obligation to represent a Bondholder which does not comply with such request.
3.3 Bondholders' rights (a) If a benefîcial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the Finance Documents, it must obtain proof of ownership of the Bonds, acceptable to the Bond Trustee.
(b) A Bondholder (whether registered as such or proven to the Bond Trustee's satisfaction to be the beneficial owner of the Bond as set out in paragraph (a) above) may issue one or more powers of attorney to third parties to represent it in relation to some or all of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall only have to examine the face of a power of attorney or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (Bondholders' rights) and may assume that it is in full force and effect, unless otherwise is apparent from its face or the Bond Trustee has actual knowledge to the contrary.
4. ADMISSION TO LISTING The Issuer shall procure that the Bonds are listed on the Oslo Stock Exchange (No. Oslo Børs) within six (6) months of the Issue Date and remain listed on an Exchange until the Bonds have been redeemed in full.
5. REGISTRATION OF THE BOI\DS
5.1 Registration in the CSD The Bonds shall be registered in dematerialised form in the CSD according to the relevant securities registration legislation and the requirements of the CSD.
5.2 Obligation to ensure correct registration The Issuer will at all times ensure that the registration of the Bonds in the CSD is correct and shall immediately upon any amendment or variation of these Bond Terms give notice to the CSD of any such amendment or variation.
5.3 Country of issuanee The Bonds have not been issued under any other country's legislation than that of the Relevant Jurisdiction. Save for the registration of the Bonds in the CSD, the Issuer is under no obligation to register, or cause the registration of, the Bonds in any other registry or under any other legislation than that of the Relevant Jurisdiction.
6. CONDITIONS FOR DISBURSEMENT
6.1 Conditions precedent for disbursement to the Issuer (a) Payment of the net proceeds from the issuance of the Bonds (net of legal costs of the Manager and the Bond Trustee and any other costs and expenses incurred in connection with the Bond Issue) into the Escrow Account shall be conditional on the Bond Trustee having received no later than two (2) Business Days prior to the Issue Date each of the following documents, in form and substance satisfactory to the Bond Trustee:
te (52) (Ð these Bond Terms duly executed by all parties thereto;
(iD the Bond Trustee Agreement duly signed by all parties thereto;
(iiD the Escrow Account Pledge duly executed by all parties thereto and perfected in accordance with applicable law;
(iv) certified copies of all corporate resolutions (including authorisations) of the lssuer required for the Issuer to issue the Bonds and execute the Finance Documents to which it is a ParlY;
(v) copies of the Issuer's articles of association and of a full extract from the relevant company register in respect of the Issuer evidencing that the Issuer is validly existing (No. "firmaattest og vedtekter");
(vi) copies of any necessary governmental approval, consent or waiver (as the case may be) required at such time to issue the Bonds;
(vii) any statements or legal opinions required by the Bond Trustee in relation to the relevant Finance Documents;
(viii) confirmation that the applicable prospectus requirements (ref the EU prospectus directive (2003171 EC)) concerning the issuance of the Bonds have been fulfilled;
(ix) confirmation that the Bonds are registered in the CSD;
(x) copies of any written documentation used in marketing the Bonds or made public by the Issuer or any Manager in connection with the issuance of the Bonds; and
(xi) copies of the Issuer's latest Financial Reports.
(b) The net proceeds from the issuance of the Bonds (net of legal costs of the Manager and the Bond Trustee and any other costs and expenses incurred in connection with the Bond Issue) will not be released from the Escrow Account and disbursed to the lssuer unless the Bond Trustee has received or is satisfied that it will receive in due time (as determined by the Bond Trustee) prior to such disbursement to the Issuer each of the following documents, in form and substance satisfactory to the Bond Trustee:
(Ð a duly executed release notice from the Issuer;
(ii) a statement of subordination in favour of the Bond Trustee of any and all claims which is required to be subordinated under items (vi) and (ix) below;
(iii) copies of the Guarantors' articles of association and of a full extract from the relevant company register in respect of each Guarantor and the Parent evidencing that each of the Guarantor and the Parent is validly existing applicable in the relevant jurisdiction;
20 (s2) (iv) copies ofnecessary corporate resolutions (including authorisations) from each of the Guarantors and the Parent to execute the relevant Finance Documents to which it is a party;
(v) confirmation that no Event of Default has occurred and is continuing or will result from the release from the Escrow Account;
(vi) copies of agreements for any existing Intercompany Loans (and any Intercompany Loans to be established upon disbursement) with the Issuer duly executed by all parties thereto, and evidence that any Intercompany Loans granted (or to be granted) to the Issuer are fully subordinated to the Bonds;
(vii) a certificate from the Issuer confirming that no indebtedness, security or guarantees (that will not constitute Permitted Security, Permitted Financial Indebtedness or Permitted Financial Support) exist within the Group following the repayment of the Existing Debt;
(viii) all relevant Transaction Security Documents relating to the Pre-Disbursement Security being executed and perfected;
(ix) copies of the template for the agreements for Subordinated Capital, and the declaration of subordination in respect of any subordinated capital;
(x) written evidence that the Existing Debt will be repaid in full prior to or in relation with the first release of funds from the Escrow Account;
(xi) any legal opinion required by the Bond Trustee (including in respect of corporate matters relating to the Issuer and the legality, validþ and enforceability of these Bond Terms and the Finance Documents) in respect of any jurisdiction by which a Security Document or any other Finance Document is governed; and
(xii) any other Finance Documents duly signed by all parties thereto'
(c) The Bond Trustee, acting in its reasonable discretion, may waive the deadline or the requirements for documentation set out in this Clause 6.1 (Conditions precedent for disbursement to the Issuer), or decide in its discretion that delivery of certain documents as set out in this Clause 6.1 (Conditions precedent for disbursement to the Issuer) shall be made subject to an agreed closing procedure between the Bond Trustee and the Issuer.
6.2 Distribution Disbursement of the proceeds from the issuance of the Bonds is conditional on the Bond Trustee's confîrmation to the Paying Agent that the conditions in Clause 6.1 (Conditions precedent for disbursement to the Issuer) have been either satisfied in the Bond Trustee's discretion or waived by the Bond Trustee pursuant to paragraph 6.1(c) above.
6.3 Tap Issues The lssuer may issue Additional Bonds if:
2r (s2) (a) the Bond Trustee has executed a Tap Issue Addendum;
(b) the representations and warranties contained in Clause 7 (Representations and Warranties) of these Bond Terms are true and correct in all material respects and repeated by the Issuer as at the date of issuance of such Additional Bonds;
(c) the Issuer meets the Incurrence Test; and
(d) the aggregate Nominal Amount of Bonds, including Additional Bonds issued under a Tap Issue does not Exceed the Maximum Issue Amount.
7 REPRESENTATIONS A¡(D WARRANTIES The Issuer makes the representations and warranties set out in this Clause 7 (Representations and warranties), in respect of itself and in respect of each Obligor to the Bond Trustee (on behalf of the Bondholders) at the following times and with reference to the facts and circumstances then existing:
(a) on the date of these Bond Terms;
(b) at the Issue Date;
(c) on each date of disbursement of proceeds from the Escrow Account; and
(d) at the date of issuance of any Additional Bonds.
7.1 Status It is a limited liability company, duly incorporated and validly existing and registered under the laws of its jurisdiction of incorporation, and has the power to own its assets and carry on its business as it is being conducted.
7.2 Power and authority It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of these Bond Terms and any other Finance Document to which it is a party and the transactions contemplated by those Finance Documents.
7.3 Valid, binding and enforceable obligations These Bond Terms and each other Finance Document to which it is a party constitutes (or will constitute, when executed by the respective parties thereto) its legal, valid and binding obligations, enforceable in accordance with their respective terms, and (save as provided for therein) no further registration, filing, payment of tax or fees or other formalities are necessary or desirable to render the said documents enforceable against it'
7.4 Non-conflict with other obligations The ehtry into and performance by it of this Bond Terms and any other Finance Document to which it is a party and the transactions contemplated thereby do not and will not conflict with:
(a) any law orregulation orjudicial orofficial order;
22 (s2) (b) its constitutional documents; or
(c) any agreement or instrument which is binding upon it or any of its assets.
7.5 Authorizations and consents All authorisations, consents, approvals, resolutions, licenses, exemptions, filings' notarizations or registrations required:
(a) to enable it to enter into, exercise its rights and comply with its obligations under these Bond Terms or any other Finance Document to which it is a party; and
(b) to carry on its business as presently conducted and as contemplated by these Bond Terms,
have been obtained or effected and are in full force and effect.
7.6 Litigation No litigation, arbitration or administrative proceedings or investigations of or before any court, arbitral body or agency which is likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
7.7 Financial Reports Its most recent Annual Financial Statements and Interim Accounts fairly and accurately represent the assets and liabilities and financial condition as at their respective dates, and have been prepared in accordance with GAAP, consistently applied.
7.8 No Material Adverse Effect Since the date of its most recent Annual Financial Statements, there has been no change in its business, assets or financial condition that is likely to have a Material Adverse Effect.
7.9 No misleading information Any factual information provided by it to the subscribers or the Bond Trustee for the purposes of this Bond Issue was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
7.10 No withholdings The Issuer is not required to make any deduction or withholding from any payment which it may become obliged to make to the Bond Trustee or the Bondholders under these Bond Terms.
7.tt Pari passu ranking Its payment obligations under these Bond Terms or any other Finance Document to which it is a party rank at least pari passø as set out in Clause 2.4.
23 (s2) 7.12 No Event of Default No Event of Default exists or is likely to result from the issuance of the Bonds or the entry into, the performance of, or any transaction contemplated by, these Bond Terms or the other Finance Documents.
7.13 Transaction Security No Security over any of the present assets of any Group Company in conflict the Bond Terms will upon release from the Escrow Account exist. .
8. PAYMENTS IN RESPECT OF THE BOI\DS
8.1 Covenant to pay (a) The Issuer will unconditionally make available to or to the order of the Bond Trustee and/or the Paying Agent all amounts due on each Payment Date pursuant to the terms of these Bond Terms at such times and to such accounts as specified by the Bond Trustee and/or the Paying Agent in advance of each Payment Date or when other payments are due and payable pursuant to these Bond Terms.
(b) All payments to the Bondholders in relation to the Bonds shall be made to each Bondholder registered as such in the CSD at the Relevant Record Date, by, if no specific order is made by the Bond Trustee, crediting the relevant amount to the bank account nominated by such Bondholder in connection with its securities account in the CSD.
(c) Payment constituting good discharge of the Issuer's payment obligations to the Bondholders under these Bond Terms will be deemed to have been made to each Bondholder once the amount has been credited to the bank holding the bank account nominated by the Bondholder in connection with its securities account in the CSD. If the paying bank and the receiving bank are the same, payment shall be deemed to have been made once the amount has been credited to the bank account nominated by the Bondholder in question.
(d) If a Payment Date or a date for other payments to the Bondholders pursuant to the Finance Documents falls on a day on which either of the relevant CSD settlement system or the relevant cuffency settlement system for the Bonds are not open, the payment shall be made on the first following possible day on which both of the said systems are open, unless any provision to the contrary have been set out for such payment in the relevant Finance Document.
8.2 Default interest (a) Default interest will accrue on any Overdue Amount from and including the Payment Date on which it was first due to and excluding the date on which the payment is made at the Interest Rate plus an additional three (3) per cent. per annum.
(b) Default interest accrued on any Overdue Amount pursuant to this Clause 8.2 (Default interest) will be added to the Overdue Amount on each Interest Payment Date until the Overdue Amount and default interest accrued thereon have been repaid in full.
24 (52) (c) Upon the occuffence of a Listing Failure Event, any principal amount outstanding under these Bonds Terms shall be considered an Overdue Amount in accordance with paragraph (a) above for as long as such Listing Failure Event is continuing.
8.3 Partial payments (a) If the Paying Agent or the Bond Trustee receives a payment that is insufficient to discharge all amounts then due and payable under the Finance Documents (a "Partial Payment"), such Partial Payment shall, in respect of the lssuer's debt under the Finance Documents be considered made for discharge of the debt of the lssuer in the following order of priorþ:
(Ð firstly, towards any outstanding fees, liabilities and expenses of the Bond Trustee (and any Security Agent);
(iÐ secondly, towards accrued interest due but unpaid; and
(iiÐ thirdly, towards any principal amount due but unpaid.
(b) Notwithstanding paragraph (a) above, any Partial Payment which is distributed to the Bondholders shall, subject to paragraph (c) below, be applied pro rata pursuant to the procedures of the CSD towards payment of any accrued interest due but unpaid and of any principal amount due but unpaid.
(c) A Bondholders' Meeting can only resolve that any overdue payment of any instalment will be reduced if there is a pro rata reduction of the principal that has not fallen due, however, the meeting may resolve that accrued interest (whether overdue or not) shall be reduced without a coresponding reduction of principal.
8.4 Taxation (a) The Issuer is responsible for withholding any withholding tax imposed by applicable law on any payments to be made by it in relation to the Finance Documents.
(b) The Issuer shall, if any tax is withheld in respect of the Bonds under the Finance Documents:
(i) gross up the amount of the payment due from the it up to such amount which is necessary to ensure that the Bondholders or the Bond Trustee, as the case may be, receive a net amount which is (after making the required withholding) equal to the payment which would have been received if no withholding had been required; and
(iD at the request of the Bond Trustee, deliver to the Bond Trustee evidence that the required tax deduction or withholding has been made.
(c) Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by law or regulation, and the Issuer shall not be responsible for reimbursing any such fees.
25 (s2) 8.5 Currency (a) All amounts payable under the Finance Documents shall be payable in the denomination of the Bonds set out in Clause 2.1 (Amount, denomination and ISIN of the Bonds). If, however, the denomination differs from the currency of the bank account connected to the Bondholder's account in the CSD, any cash settlement may be exchanged and credited to this bank account.
(b) Any specific payment instructions, including foreign exchange bank account details, to be connected to the Bondholder's account in the CSD must be provided by the relevant Bondholder to the Paying Agent (either directly or through its account manager in the CSD) within five (5) Business Days prior to a Payment Date. Depending on any cunency exchange settlement agreements between each Bondholder's bank and the Paying Agent, and opening hours of the receiving bank, cash settlement may be delayed, and payment shall be deemed to have been made once the cash settlement has taken place, provided, however, that no default interest or other penaþ shall accrue for the account ofthe Issuer for such delay.
8.6 Set-off and counterclaims The Issuer may not apply or perform any counterclaims or set-off against any payment obligations pursuant to these Bond Terms or any other Finance Document.
9. INTEREST
9.1 Calculation of interest (a) Each Outstanding Bond will accrue interest at the Interest Rate on the Nominal Amount for each Interest Period, commencing on and including the first date of the Interest Period, and ending on but excluding the last date of the Interest Period.
(b) Interest will accrue on the Nominal Amount of any Additional Bond for each Interest Period starting with the Interest Period commencing on the Interest Payment Date immediately prior to the issuance of the Additional Bonds (or, if the date of the issuance is not an Interest Payment Date and there is no Interest Payment Date prior to such date of issuance, starting with the Interest Period commencing on the Issue Date).
(c) Interest shall be calculated on the basis of the actual number of days in the Interest Period in respect of which payment is being made divided by 360 (actuaU360-days basis). The Interest Rate will be reset at each Interest Quotation Day by the Bond Trustee, who will notiff the Issuer and the Paying Agent and, if the Bonds are listed, the Exchange, of the new lnterest Rate and the actual number of calendar days for the next Interest Period.
(d) Any interpolation of the interest rate will be quoted with the number of decimals corresponding to the quoted number of decimals of the Reference Rate.
9.2 Payment of Interest Interest shall fall due on each Interest Payment Date for the corresponding preceding Interest Period and, with respect to accrued interest on the principal amount then due and payable, on each Repayment Date.
26 (52)