SBB / Telemach Group €175,000,000 PIK Loan June 2014
Total Page：16
File Type：pdf, Size：1020Kb
Strictly confidential – intended for the recipient only SBB / Telemach Group €175,000,000 PIK Loan June 2014 0 Strictly confidential – intended for the recipient only Important information and disclaimer BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES TO USE ANY SUCH INFORMATION IN ACCORDANCE WITH THE FOLLOWING RESTRICTION AS WELL AS ITS COMPLIANCE POLICIES, CONTRACTUAL OBLIGATIONS AND APPLICABLE LAW. This presentation has been prepared solely for information purposes. For the purposes of this notice, ‘presentation’ shall mean and include this document, any oral presentation of this document by any person, hard copies of this document and any materials distributed at or in connection with this document and/or the presentation. This presentation and the information contained in the presentation is limited in nature and is not, and should not be relied on as, a promise or representation as to future results or events or the outcome of the transactions contemplated. Recipients should conduct their own independent investigation and assessment as to the information contained in the presentation and the economic, financial, regulatory, legal, taxation and accounting implications of the transactions contemplated. The information contained in this presentation has not been independently verified by any person, including by Credit Suisse AG, London Branch or any of its affiliates (CS) or KKR Capital Markets Limited or any of its affiliates (KCM). No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or forward-looking statements, forecasts, projections, opinions and estimates contained herein, and nothing in this presentation is, or shall be relied upon as, a promise or representation for any purpose by any person, including CS, KCM, Kohlberg Kravis Roberts (KKR), Slovenia Broadband S.à r.l., Adria TopCo B.V. (together with Adria MidCo B.V. and Adria BidCo B.V. and their subsidiaries, ADRIA), any of their respective affiliates, advisors or representatives or any other person. CS and KCM shall not have, to the extent permitted by law, any liability for the information contained herein or any omissions therefrom or for any reliance that any party may seek to place upon such information. Recipients should not construe the contents of this presentation as legal, business or tax advice and should consult with their own attorney, business, tax and other advisors as to legal, regulatory, business, economic, tax and related matters related hereto. This presentation contains forward-looking statements, forecasts, projections, opinions and estimates. The information, forward-looking statements, forecasts, projections, opinions and estimates offered herein are, in each case: (i) subject to change without notice (as are statements about market trends) and speak only as of the date they were developed or the date specified herein, reflect current expectations and/or beliefs concerning future events, are based on assumptions and assessments made by ADRIA’S management in good faith and believed by management to be reasonable in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate; (ii) based on assumptions, all of which are difficult to predict and many of which are beyond the control of ADRIA and are also subject to change; (iii) subject to known and unknown risks, uncertainties and other factors, which may result in substantial divergence between the actual results, financial situation, development or performance of the ADRIA group and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers should not rely on forward-looking statements, forecasts, projections, opinions and estimates. In addition, any calculations used to generate the estimates were not prepared with a view towards public disclosure or compliance with any published guidelines. None of CS, KCM, KKR, or, ADRIA, nor any other person assumes any responsibility to update or correct forward-looking statements, forecasts, projections, opinions and estimates or to adapt them to future events or developments or for any other reason. This presentation contains financial information regarding the business and assets of ADRIA and its consolidated subsidiaries. Such financial information may not have been audited, reviewed or verified by any independent accounting firm and the financial information as presented herein may not be comparable to other similarly titled measures used by other companies. The inclusion of such financial information in this document or any related presentation should not be regarded as a representation or warranty by ADRIA, CS, KCM, KKR or any other person as to the accuracy or completeness of such information’s portrayal of the financial condition or results of operations by ADRIA and its subsidiaries. This presentation and its contents are confidential are not for public-distribution and are solely for your information on a confidential basis and may not be copied, reproduced, distributed, passed on or disclosed , in whole or in part, by any medium or in any form to any other person. If you have received this presentation in effort please note that these materials are confidential and return them to ADRIA immediately. This presentation does not constitute a commitment by any person to underwrite, subscribe for or place any securities or other debt financing, to extend or arrange any credit or to provide any other services. 1 Strictly confidential – intended for the recipient only Transaction overview 2 Strictly confidential – intended for the recipient only Transaction overview SBB / Telemach (“SBB”) is the leading distributor of cable and satellite pay-TV, broadband internet, fixed-line telephony and supplementary value adding services in Slovenia, Serbia and Bosnia and Herzegovina − LTM March 2014 revenue of €251m and March 2014 L2QA Adjusted EBITDA of €122m In the fall of last year, KKR agreed to acquire SBB from Mid-Europa Partners for a total consideration of €1bn (implied valuation of 9.5x) − Acquisition was backed by a €475m Senior Secured Notes offering, representing a 55% equity contribution SBB is seeking to raise €175m of PIK Loans out of Adria TopCo B.V. (outside of existing bond restricted group) to fund a return of capital to shareholders − Over €410m of equity still remains in the business; representing 70% of initial equity invested − Pro forma for the Transaction, Adria TopCo B.V. will have consolidated net leverage of 5.43x based on March 2014 L2QA Adjusted EBITDA 3 Strictly confidential – intended for the recipient only Estimated Sources and Uses Estimated Sources and Uses Sources €m Uses €m PIK Loan 175 Return of capital to shareholders 171 Estimated transaction costs 4 Total Sources 175 Total Uses 175 Estimated PF Capitalisation Mar'14 Adj. PF Capitalisation xAdj. L2QA xAdj. L2QA Amount Amount Maturity Margin in €m EBITDA EBITDA Reference EBITDA 122 122 Cash and Cash Equivalents (19.7) (0.16x) — (19.7) (0.16x) Capital Lease 7.3 0.06x — 7.3 0.06x SSRCF ( €60m) 25.1 0.21x — 25.1 0.21x 2019 E + 4.25% Senior Secured Notes due 2020 475.0 3.89x — 475.0 3.89x 2020 7.875% Net cash pay leverage 487.7 4.00x 487.7 4.00x New TopCo PIK Loan — — 175.0 175.0 1.43x 2019 [•]% Net leverage 487.7 4.00x 662.7 5.43x 4 Strictly confidential – intended for the recipient only Summary termsheet SBB / Telemach – HoldCo TopCo B.V. Borrower Adria TopCo B.V. Issue ranking Senior PIK Loans Security Pledge over the shares of Adria MidCo B.V. Guarantees None Principal amount €175m Interest [•]%; PIK payable semi-annually, pay-if-you-want (75bps discount if paid in cash) Maturity 5 years Currency EUR Call protection NC1 / 102 / 101 Issue rating Unrated Ranking Structurally subordinated to the Existing Senior Secured Notes, Senior in respect of indebtedness of the Borrower Covenants Based on Existing Senior Secured Notes but with customary limitations for PIK instruments Transferability Freely transferable subject to minimum €1m transfers and €2m per lender Change of control Lenders put at 101 (100 if borrower does not own 100% of Adria Midco) Governing Law English Law / New York Law covenants 5 Strictly confidential – intended for the recipient only Pro Forma organisational structure KKR, mgmt and co-investors Adria TopCo B.V. €175m New PIK Loan (the “Borrower”) Share pledge Restricted group Adria Midco B.V. €60 RCF Adria Bidco B.V. €475m Existing SSN (“The issuer”) Slovenia Adria Serbia Holdco Broadband S.á.r.l. B.V. (Luxembourg) (Netherlands) Adria Cable BV BBB S.á.r.l. Adria Media B.V. Telemach Slovenia Adria Bidco d.o.o. (Netherlands) (Luxembourg) (Netherlands) (Slovenia) Beograd SBB Serbia Telemach Bosnia Telemach Rotovž d.d. (Serbia) (Bosnia) (Slovenia) Other non-Guarantor Other non-Guarantor Other non-Guarantor Other non-Guarantor Telemach Tabor d.d. subsidiaries subsidiaries subsidiaries subsidiaries (Slovenia) Other non-Guarantor = Guarantors of SSNs subsidiaries 6 Strictly confidential – intended for the recipient only SBB / Telemach Group 7 Strictly confidential – intended for the recipient only The Group is the leading provider of cable and satellite pay-TV Services in Slovenia, Serbia and Bosnia with access to 20m population The Group Slovenia Serbia Bosnia Montenegro Croatia Macedonia United Country Worldwide Media Group EU Member Candidate N/A Candidate Member Candidate NR NR membership / € / Hard € RSD BAM € HRK MKD € Currency currencies (1) (2) (3) 30% 45% 10% 2% 1% 0.4% 1% 10% 2013 revenue Entities / brands (4) (4) Pay-TV -- -- Broadband (5) (5) (5) -- -- -- -- -- (within footprint) Telephony -- -- -- -- -- Positioning (by revenue) (by (6) Cable 445k 767k 202k -- -- -- -- -- Cable RGU/sub 2.31x 1.54x 1.73x -- -- -- -- -- RGUs DTH (7) (Mar ’14) (Mar 33k 188k 96k 46k 29k 15k -- -- OTT -- 2k -- -- -- --62k -- Source: Company data Note: Revenue split different versus HY reporting. DTH revenues are split by geographies above. HY report includes DTH revenues under SBB Serbia Group.