lock-up agreement and updated materials
TRANSCRIPT
2
Disclaimer
By reading or attending the presentation that follows, you agree to be bound by the following limitations.
This presentation has been prepared by BAHÍA DE LAS ISLETAS, S.A. and its subsidiaries (the “Company” or “we”) solely for informational purposes and does not constitute, and
should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation or inducement to any person to purchase, underwrite, subscribe to or otherwise
acquire securities in the Company. This presentation is intended to provide a general overview of the Company and its business and does not purport to deal with all aspects and details
regarding the Company.
For the purposes of this disclaimer, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on its
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The Company has included non-IFRS financial measures in this presentation. These measurements may not be comparable to those of other companies. Reference to these non-IFRS
financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS.
The information contained in this presentation has not been subject to any independent audit or review. A significant portion of the information contained in this presentation, including
all market data and trend information, is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be
accurate. Our internal estimates have not been verified by an external expert, and we cannot guarantee that a third party using different methods to assemble, analyse or compute
market information and data would obtain or generate the same results. We have not verified the accuracy of such information, data or predictions contained in this presentation that
were taken or derived from industry publications, public documents of our competitors or other external sources. Further, our competitors may define our and their markets differently
than we do. In addition, past performance of the Company is not indicative of future performance. The future performance of the Company will depend on numerous factors, which are
subject to uncertainty, including factors which may be unknown on the date hereof. In addition, the business and viability plans are subject to ongoing update.
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notwithstanding that such statements are not specifically identified. Examples of forward-looking statements include, but are not limited to: (i) statements about future financial and
operating results; (ii) statements of strategic objectives, business prospects, future financial condition, budgets, projected levels of production, projected costs and projected levels of
revenues and profits of the Company or its management or boards of directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such
statements.
Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of
the Company. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. We have based these
assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do
not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, could be materially adversely
affected. You should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made. The
Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after the date on
which such statement is made, or to reflect the occurrence of unanticipated events.
3
Covid19 Response
• 2 routes discontinued in H1 2020, with 17 vessels on
port and a reduction of almost 30% in miles sailed
(70% in certain months)
• 725 employees were subject to an ERTE program
• Renegotiation of port taxes to minimize the cash burn
• Deferment of bareboat/time charter payments for
€15m
• Reduction of maintenance capex through the
reschedule of dry dockings
• Elimination of non-essential expenses
Operational Measures New Financing
• €75.3m new ICO loans
• Agreement to issue a new ring-fenced facility (the
“Vessels Facility”), split into a receivables facility of
€40m and a delayed draw facility of €35m for the
improvement of the vessels fleet (total €46m drawn as
of today)
• Agreement with a group of Noteholders representing
c.72.2% of the 2023 and 2024 notes (the “AHC”) for a
new delayed-draw Bridge Facility of €185m split into
€43m already drawn and c.€142m pending to be
drawn. Of the undrawn amount, €57m will be used for
liquidity of the Company, €25m to backstop new
Working Capital Facilities(1), c.€60m to be used to
refinance the Vessels Facility
• Agreement with Santander to provide c.€44m in new
WC Facilities(2)
The Company has taken a number of measures to improve its liquidity and overcome the negative impact of Covid19
Notes:
1. If remaining Spanish Banks do not provide their pro rata share
2. Corresponds to Santander’s pro rata of the €70m new WC Facilities
4
Current Capital Structure
Maturity Profile(8)
Current Capital Structure – Excluding Bridge Facility
282.0
-- --
300.0
--31.0 --
1.1
2.2
2.2 7.7
46.0
20.1 12.4
54.6
10.6
4.7 13.0
51.1
12.4
383.7
312.7
6.9 20.7
FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 or >
2023 Notes 2024 Notes SSRCF La Esfinge Loan Vessels Facility Other Debt
Notes
(1) €40m of the receivables facility and €6m of the delayed draw facility are drawn as of today; (2) Does not include accrued interest; (3) c.€5.3m MtM of current swap. Total is subject to changes on a daily basis and may vary until closing date; (4) Company has
intention to pursue upsizing of ICO Loans when certain fuel swaps crystallize; (5) $16.1m USD converted at a EUR / USD rate of 0.82 as per February 16th, 2021 FX rate; (6) Corresponds to the deferred price provision derived from the purchase of Compañía
Trasmediterránea, S.A shares. The deferred price has deadline set for full payment at July 30, 2023; (7) Assumes zero cash on BS previous to the injection of Tranche A of the Bridge A Facility; (8) Excludes recently injected Bridge Facility
Amount (€m) Margin Maturity Governing Law Security
Vessels Facility(1) 46.0E + 7.50% Cash / 2.25%
PIKFeb-2023 English Vessels / Invoices
La Esfinge Loan 13.1 3mE + 2.0% Jan-2027 Spanish Dock
Asset-Backed 59.1
Super Senior RCF(2) 31.0 3mE + 3.00% Jul-2021 English Vessels
2023 Notes(2) 282.0 3mE + 6.5% Jul-2023 New York Vessels
2024 Notes(2) 300.0 3mE + 4.25% Nov-2024 New York Vessels
SS IR Swap(3) 5.3 n.a. Apr-2021 English Vessels
ICA Debt 618.3
Total 677.4
ICO Loans(4) 75.3 Various Various Spanish Unsecured
Confirming 2.4 n.a. Uncommitted Spanish None
Crystalized Fuel Swap(5) 13.2 n.a. Already matured English Unsecured
Deferred Transmediterranea Payment(6) 27.0 n.a. Jul-2023 n.a. Unsecured
Other Debt - Antalex 0.8 n.a. n.a. n.a. n.a.
Other Debt 118.7
Total Debt 796.1
Cash and Equivalents(7) --
Total Net Debt 796.1
5
Simplified Pre-Restructuring Corporate
Structure(8)
Notes: (1) Guarantors include Naviera Armas S.A., Compania Trasmediterranea S.A., Anarafe S.L.U., Caflaja S.L.U., Maritima de Barlovento S.L.U., Maritima de las Islas S.L.U., Maritima de Sotavento S.L.U.; (2) Guarantors include Bahía de las Isletas, S.L.; Anarafe,
S.L.U.; Estudios y Consignaciones, S.L.U.; Terminales Marítimas Armas, S.L.; Marítima de las Islas, S.L.U.; Naviera de Jandía, S.L.U.; Marítima de Barlovento, S.L.U.; Marítima de Sotavento, S.L.U.; Caflaja, S.L.U.; Compañía Trasmediterránea, S.A.; Hermes
Logística, S.A., Terminal Ferry Barcelona, S.R.L., Agencia Schembri, S.A. and Trasmediterránea Cargo, S.A.; (3) RCF super senior by means of the ICA; (4) Share pledges over shares of Bahía De Las Isletas, S.L., Naviera Armas, S.A., Anarafe, S.L.U., Estudios y
Consignaciones, S.L.U., Marítima de las Islas, S.L.U., Naviera de Jandía, S.L.U., Marítima de Barlovento, S.L.U. and Marítima de Sotavento, S.L.U.; Terminal Ferry Barcelona, S.R.L., Agencia Schembri, S.A.; Trasmediterránea Cargo, S.A.; Hermes Logística, S.A. and
Compañia Trasmediteránea; (5) Pledges over Trasmediterránea’s subsidiaries’ shares only secure the Issuer´s obligations under the 2024 Notes up to €31.3m; (6) Vessels located in Maritima de Barlovento, Maritima de Sotavento, Maritima de las Islas, Caflaja and
Naviera de Jandia; (7) Referes to confirming amounts at Trasmediterránea and subsidiaries; (8) Excludes impact of Bridge Facility injection on security package
Holding Company
Operating Company
New SPV Companies
Vessels Facility Guarantor(1)
Vessels Facility Share Pledge
La Esfinge Loan Collateral
Luxembourg entity
Naviera Armas, S.A.Compañía
Trasmediterránea S.A.Other Subsidiary OpCos(6)
Other OpCos
Other HoldcosOther Holdcos
OpCos
Vessels Facility SPVs
Bahía de las Isletas, S.L.
€m
€40m Facility A 40.0
€35m Facility B 6.0
Total 46.0
Legend
Anarafe, S.L.U.
Spanish entity
Notes & RCF Guarantor(2)
Notes & RCF Share Pledge(3)(4)(5)
Notes & RCF Vessels Pledged
Vessels Facility Vessels Pledged
Vessels Facility Invoices Pledged
€m
2023 Notes 282.0
2024 Notes 300.0
RCF 31.0
La Esfinge Loan 13.1
ICO Loans 47.5
Confirming 0.5
Cryst. Fuel Swap 10.1
Total 684.2
Antonio ArmasFernández
Armas Family
69.98%
€127m€m
ICO Loans 27.9
Confirming 1.9(7)
Cryst. Fuel Swap 3.1
Total 32.9
€215m
€157m
€29m
€11m
1
47
4
1
€95m
4
€19
1
€401m(8)
€250m(8)30.02%
€m
Def. TM Payment 27.0
Total 27.0
6
Fleet Summary and Unrestricted SPVs(6)
GroupUnrestricted
SPVs
€6.0m
Payable(4)
€105.8m
Receivable(5)
€m(1)
SF Levante 12.5
SF Baleares 27.5
Alcantara Dos 3.8
Almudiana Dos 6.8
Al Andalus --(2)
Tirajana 24.5
Ciudad de Ibiza 24.5
Volcán de
Tagoro75.0
New Fast Ferry 78.0(3)
€24.7m Annual
Charters
€m(1)
Las Palmas de
Gran Canaria9.5
Ciudad de Palma 52.5
Ciudad de
Granada42.5
Ciudad
Autonoma de
Melilla
42.5
Villa de Agaete 19.5
Volcan de
Tamadaba35.0
Volcan de
Taburiente29.5
Volcan de
Tindaya16.5
Volcan de
Teneguia13.5
Volcan de Tauce 10.5
Volcan de
Tamasite28.5
€m(1)
Volcan de Teno 18.5
Volcan de
Tijarafe32.5
Volcan de
Timanfaya29.5
Volcan de
Tinamar76.5
Volcan de Teide 76.5
Almariya 5.5
Ciudad de Ceuta 23.5
Ciudad de
Mahon29.5
Ciudad de
Malaga10.5
JM Entrecanales 29.5
Juan J. Sister 18.5
Total 252.5
Total 650.5
External
Bank Debt
€185.7m(7)
Notes
(1) Alta Shipping latest valuation as of 5th of November, 2020. Additional valuation performed by FEM Shipbrokers shows a €600m valuation of the Group’s vessels as of 24th of November, 2020; (2) No valuation available; (3) Estimated valuation at delivery; (4)
Unpaid InterCo Leases; (5) InterCo Loans provided by the Group to the construction of vessels, accruing interest at a 7.5% rate; (6) Analysis excludes Villa de Teror; (7) Includes 3rd party debt at time of delivery for the New Fast Ferry
7
Summary Business Plan
FY21 – FY22 Projections:
• FY21 projected assuming Strait does not open during the year but
there is a general improvement of activity for summer of FY21 vs
FY20
• Price increases in FY21 vs FY20 applied as of January FY21,
and a further price increase of 3% both in cargo and
passengers in FY22
• Both 2021 and 2022 are built bottom-up based on FY20 and FY19
activity and adjusted for planned changes in fleet and routes
• Activity assumes resumed opening of Huelva – Canarias route
in July 2021 previously transferred to FRS in 2017 due to a
competition ruling from the acquisition of Trasmediterránea
• Given uncertainties about timing of Covid solution, FY22
represents a discontinuity case vs FY21. FY 22 projected
based on FY19 actuals including the re-opening of the Strait
• FY21 WC impacted by a high level of overdue normalization (c.€86m),
and FY22 will still be impacted by a normalization of DPO and DSO
FY23 – FY24 Guidance:
• Company expects to generate revenues between €650m - €700m in
FY23 and FY24 as activity returns to historical levels and it is able to
properly implement its business plan
• Company’s gross margin expected to remain similar to FY22, as
historical variable costs as percentage of revenue will continue in line
with historical levels
• EBITDA margins for the two projected years beyond the budget to
remain at c.15% with EBITDA ranging between €95m - €110m, as
fuel, structure and fixed costs of vessels are expected to remain
relatively constant for both years when compared with FY22
• Change in WC for FY23 and FY24 expected to be close to zero as
historical collection and payment days remain relatively constant at
historical levels
• Capex is expected to remain at historical maintenance levels of €30m
for both FY2023 and FY2024
The Company has elaborated a BP assuming that Covid19 restrictions will continue to impact demand until the end of 2021
Notes: (1) Includes other Income, consolidated adjustments and on-board services; (2) Includes only maintenance capex (i.e. no investments in scrubbers included in capex projections); (3) Includes €40m shareholder capital injection, €9.6m Intracompany Loan repayment
and other CFs; (4) Assumes Company has excess vessels capacity and is able to divest c.€150m of vessels between FY22 – FY23
€MM FY2020E FY2021E FY2022E
Passenger Revenue Balearic Islands 26.7 28.6 39.8
Passenger Revenue Strait 27.2 30.5 126.0
Passenger Revenue Canary Islands 56.8 70.3 101.1
Total Passenger Revenue 110.7 129.5 266.8
Freight Revenue Balearic Islands 90.7 99.4 111.9
Freight Revenue Strait 29.7 30.7 32.8
Freight Revenue Canary Islands 96.7 103.3 132.4
Total Freight Revenue 217.1 233.4 277.2
Land Transportation 104.0 105.8 114.9
Other(1) 30.1 23.4 (3.7)
Revenue 462.0 492.1 655.2
Direct Costs (121.1) (122.3) (143.6)
Gross Margin 340.9 369.8 511.5
Gross Margin (%) 73.8% 75.1% 78.1%
Fuel (113.0) (106.2) (159.2)
Structure Costs (64.0) (51.2) (45.9)
Fixed Costs of Vessels and Port Expenses (130.4) (116.7) (117.7)
Personnel Expenses (77.1) (81.0) (89.3)
EBITDA (43.7) 14.8 99.5
EBITDA Margin (%) n.m. 3.0% 15.2%
Change in WC (123.8) (27.3)
CAPEX(2) (15.4) (25.4)
Other CF(3) 22.1 --
Potential Divestments(4) -- 75.0
CF Before Debt Service (102.3) 121.8
8
FY2020E FY2021E FY2022E
1H2020 2H2020 Total 1H2021 2H2021 Total 1H2022 2H2022 Total
Passengers (#000s) - Balearic Islands 125.2 243.2 368.4 122.9 251.8 374.8 235.3 365.0 600.4
Implicit Tariff per Passenger (€) - Balearic Islands 65.5 76.2 72.6 60.0 84.5 76.4 62.4 68.7 66.2
Passenger Revenue Balearic Islands (€m) 8.2 18.5 26.7 7.4 21.3 28.6 14.7 25.1 39.8
Passengers (#000s) - Strait 328.7 180.8 509.5 118.2 363.7 481.9 705.9 1,512.8 2,218.7
Implicit Tariff per Passenger (€) - Strait 49.2 60.6 53.3 54.0 66.4 63.3 53.1 58.5 56.8
Passenger Revenue Strait (€m) 16.2 11.0 27.2 6.4 24.1 30.5 37.5 88.5 126.0
Passengers (#000s) - Canary Islands 448.7 752.2 1,200.9 389.2 847.3 1,236.5 1,091.2 1,422.9 2,514.1
Implicit Tariff per Passenger (€) - Canary Islands 43.7 49.5 47.3 55.6 57.5 56.9 43.0 38.0 40.2
Passenger Revenue Canary Islands (€m) 19.6 37.2 56.8 21.6 48.7 70.3 47.0 54.1 101.1
Lane Mts (#000s) - Balearic Islands 1,540.7 1,503.5 3,044.2 1,716.6 1,778.8 3,495.4 2,008.3 1,955.5 3,963.8
Implicit Tariff per Lane Meter (€) - Balearic Islands 28.9 30.7 29.8 28.1 28.8 28.4 28.4 28.1 28.2
Freight Revenue Balearic Islands (€m) 44.5 46.2 90.7 48.2 51.3 99.4 57.0 54.9 111.9
Lane Mts (#000s) - Strait 672.5 759.5 1,432.0 670.8 698.6 1,369.5 709.6 634.9 1,344.5
Implicit Tariff per Lane Meter (€) - Strait 22.6 19.1 20.8 22.1 22.6 22.4 23.8 25.1 24.4
Freight Revenue Strait (€m) 15.2 14.5 29.7 14.9 15.8 30.7 16.9 16.0 32.8
Lane Mts (#000s) - Canary Islands 1,039.8 1,098.0 2,137.8 1,133.1 1,199.6 2,332.7 1,525.0 1,502.4 3,027.4
Implicit Tariff per Lane Meter (€) - Canary Islands 46.7 43.9 45.2 43.5 45.0 44.3 44.5 43.0 43.7
Freight Revenue Canary Islands (€m) 48.5 48.2 96.7 49.3 54.0 103.3 67.8 64.6 132.4
On-Board Revenue per Passenger (€) 2.74 2.52 2.62 2.40 2.40 2.40 2.40 2.40 2.40
Miles Sailed (#) 660,308.1 807,380.9 1,467,689.0 1,052,752.1 1,157,768.7 2,210,520.8
Implicit Fuel Price per Mile (€ / Mile)(1) 71.4 73.1 72.3 72.7 71.4 72.0
Total Fuel Cost (€m) 47.1 59.0 106.2 76.6 82.6 159.2
Business Plan – Key KPIs
Note:
(1) Implicit fuel price per mile includes mix of price and consumption of different types of fuel, respective premiums paid on said fuels, costs of lubricant, effects of swaps and others
9
Introduction to the Restructuring – Lockup
Agreement
Notes
(1) €25m to be backstopped by the AHC and €43.5m to be provided by Banco Santander; (2) Includes €100m from interim bridge facility, €70m of WC facilities, €40m of capital increase by the shareholder and €9.6m from repayment of Intercompany loans.
Contributions
from all
stakeholders
Current Creditors
Will modify the terms of their debt to extend their
maturities
Will capitalize a substantial portion of their debt
Will contribute €100m of new emergency liquidity
(Tranches A and B on the Bridge Facility) and €70m of
new working capital lines(1)
Will take out the Vessel Facility to simplify the capital
structure
Shareholder
Will contribute €40m of new money through a capital
increase
Will be subject to certain ownership dilution as a result
of the debt capitalization
Advantages
of the
Transaction
Liquidity
Transaction will provide €220m(2) of
new liquidity which will prove sufficient
to endure the Covid-19 pandemic,
even with the assumption that 2021
demand levels remain highly affected
1 Term
Transaction will provide sufficient
runway in order to properly develop
the Business Plan and reach the
expected normalized EBITDA c.
€100m through the extension of the
Group´s maturity profile, particularly
with new Notes maturing in 2026
2 Deleveraging and Recapitalization
Transaction will significantly diminish
the annual financial burden
Reduction of net debt and
recapitalization as a result of debt
capitalization (€245m of Notes
converted into equity), and the capital
increase
3
Stability
Contribute stability to the Group through the
replacement of non-committed bilateral
working capital lines for committed long-term
lines
4 Corporate Governance
Transaction will improve the Company’s corporate governance
by introducing a new board, a chief restructuring officer and a
new executive committee
5
The Company, certain Holders of the Notes represented by members of an ad hoc committee (the “AHC”), Banco Santander and the Shareholder
have entered into a Lock-Up Agreement to implement a Recapitalization transaction. The next pages summarize the key terms of the
restructuring, new capital structure and the new equity / governance arrangements
10
Bridge Facility Key Terms
Key Considerations
Instrument
Delayed-draw Term Loan of €185m
Initial draw of €35m (“Facility A”) made on December 30th, 2020
€65m (“Facility B”), €8m of which were drawn on January 27th, 2021 and the remainder to be drawn following the execution of the
lock-up agreement
€60m (“Facility C”) to refinance the Vessels Facility
€25m (“Facility D”) to backstop the Working Capital Facilities from Caixabank and Sabadell
Issuer Naviera Armas S.A.
Interest E + 250bps cash and E + 750 bps PIK
Guarantors
Bahia de las Isletas, SL, Naviera Armas S.A., Agencia Schembri, S.A., Anarafe SLU, Caflaja SLU, Compañía Trasmediterránea S.A.,
Estudios y Consignaciones SLU, Hermes Logistica SA, Maritima de Barlovento SLU, Maritima de las Islas SLU, Maritima de Sotavento SLU,
Naviera de Jandia SLU, Terminal Ferry de Barcelona SRL, Terminales Maritimas Armas SLU, Armas Trasmediterránea Factoring, S.L
Fees
2.0% backstop fee(1)
5.0% exit fee(1)
2% OID(1)(2)
Prepayment Make-whole premium (carve-out for asset sales and proceeds from any issuance of subordinated capital at 103)
Maturity 31st July, 2021 with option to extend by up to 2 months
Guarantees and
Security Package
Facility A secured by:
Mortgages over the following 4 vessels: Volcán de Tamadaba, Tazacorte, Volcán de Tauce, and Volcán de Tindaya
All intercompany loans with the Unrestricted Group Family SPVs
Super Senior on the ICA common security package (including pledges over shares of the main entities in the Group)(3)
Upon Facility B utilization:
All unencumbered vessels will be incorporated to the common ICA security and Bridge will be super senior
Other The Company continues to work with SEPI to raise additional financing
The AHC has committed a Bridge Facility which will provide sufficient liquidity to implement the Restructuring
Notes
(1) To be paid in kind; (2) 2% OID on total committed amount paid in kind by increasing the principal debt outstanding; (3) Entities include Naviera Armas S.A., Maritima de Sotavento SLU, Naviera de Jandia SLU, Estudios y Consignaciones SLU, Anarafe SLU,
Maritima de Barlovento SLU, Maritima de las Islas SLU, Bahia de las Isletas SL, 99.6% of Hermes Logistica S.A., Compañía Trasmediterranea S.A., Agencia Schembri S.A., Trnsmediterranea Cargo S.A., Terminal Ferry Barcelona SRL,
11
Restructuring Key TermsKey Considerations
Asset
Backed
La Esfinge
Loan
Issuer: Naviera Armas, S.A.
Amount: €13.1m
Interest: 6mE + 2%; paid semi-annually
Maturity: Jan-27
Repayment: 6.46% of the principal amount to be repaid on the first month of each of the interest period, payments begin in Jul-21
Security: Mortgage on the concession over the plot of land in the Port of Las Palmas and over the credit rights arising from the
construction agreement with Dragados for the purposes of building the port project
Ranking: Secured by (i) rights under certain hedging agreements (ii) rights under La Esfinge Concession and the related construction
agreement and insurance policies and (iii) a mortgage over La Esfinge Concession
Governing law: Spanish law
Jurisdiction: Spanish Courts
ICA Debt
Super
Senior RCF
Issuer: Anarafe, S.L.U.
Amount: €38.1m(1) (incl. existing Super Senior RCF and unpaid Interest Rate Swap and its Mark to Market to be refinanced by new
Super Senior RCF)
Interest: E+4.25% and 30% commitment fee
Initial Fee: €100k paid in cash
Exit Fee: 2.0% on the average utilization of the Super Senior RCF during the life of the loan and payable upon maturity / exit
Maturity: 30 April 2025
Security: Common Security and Guarantee Package (see following slides)
Covenants: Maximum leverage covenants with 30% headroom on the business plan approved by the new Board of Directors.
Covenant holiday until December 2022
Governing law: English law
Jurisdiction: Courts of England
Super
Senior
Basket
Issuer: Anarafe, S.L.U.
Instrument: RCF / Confirming / Factoring Lines / LCs / Guarantees
Amount: €100m of which c.€38.1m are utilized day 1 by the Super Senior RCF(1)
Maturity: 30 April 2025
Security: Common Security and Guarantee Package (see following slides)
Governing law: English law
Jurisdiction: Courts of England
Notes
(1) To be adjusted based on IRS MtM at the refinancing date
12
Restructuring Key Terms (Cont.)
Key Considerations
ICA Debt
1L Term
Loan
Issuer: Anarafe, S.L.U.
Amount: Up to €206.5m(1) of the Bridge Facility
Interest: 3mE + 7.5% cash + 2.5% PIK
Maturity: 30 September 2025
Security: Common Security and Guarantee Package (see following slides)
Non-call period: Non-call 21 months from the completion of the Financial Restructuring. Carve out for asset sales and proceeds from
any issuance of subordinated capital at 103
Equity: Equivalent to 5.65% of proforma Class A shares stapled to 1L TL. 7.5% of Class B shares
Covenants: Minimum liquidity of €10m tested monthly for the first 30 post closing months and quarterly thereafter
Governing law: English law
Jurisdiction: Courts of England
New
Confirming
Line
Instrument: New fully committed confirming lines
Amount: €20m
Interest: Euribor (0% floor) + 3.50%
Maturity: 30 April 2025
Lenders: €12.4m Santander / Caixabank and Sabadell to be offered to participate in the confirming in the amount of €5.2m and €2.3m
respectively, and if they do not participate, the AHC will backstop their allocation
Security: Common Security and Guarantee Package (see following slides)
Note
1. Includes €185m principal (includes illustrative assumption that the €25m Facility D is fully drawn at the completion of the Financial Restructuring) plus fees and accrued interest assuming completion of the Financial Restructuring at 30 June 2021
13
Restructuring Key Terms (Cont.)
Key Considerations
ICA Debt 1.5L SSNs
Issuer: Anarafe, S.L.U.
Amount: €366m(1) (which includes interest accrued but unpaid under the Existing SSNs until 30 June 2021)
Interest:
3 month EURIBOR (0% floor) + 1% cash plus either (i) 11.0% cash or (ii) 11.75% PIYC for the first 30 months
3 month EURIBOR (0% floor) + 12.0% cash after 30 months
Maturity: 31 March 2026
Security: Common Security and Guarantee Package (see following slides)
Non-call period: 2 years from the completion of the financial restructuring (par thereafter). Carve out for asset sales and proceeds
from any issuance of subordinated capital at 103
Covenants: Same as 1L Term Loans, provided that the financial maintenance covenant to be activated upon repayment of the Bridge
Facility or the 1L Term Loan as appropriate and limited to minimum liquidity of €10m tested monthly for the first 30 months post
closing and quarterly thereafter
Equity:
Equivalent to 43.35% of proforma Class A shares stapled to 1.5L SSNs. 57.5% of Class B shares.
Once Existing SSNs Holders are paid par + accrued interest(2), 1.5L SSNs equity reduced from 57.5% to 42.5%
Governing law: New York law
Jurisdiction: Courts of New York
Notes
1. An additional amount of 1.5L SSNs may be issued in discharge of certain advisers fees
2. This amount shall include: (i) the current principal value of the Senior Secured Notes; (ii) all currently unpaid and accrued interest on the Senior Secured Notes; and (iii) an amount equal to the interest that accrues and remains unpaid on the Senior Secured
Notes at current interest rates up until the date on which the Company is sold
14
Restructuring Key Terms (Cont.)
Key Considerations
Common
Security and
Guarantee
Package
Two newly incorporated newcos(1) to be inserted between Bahia de las Isletas and its immediate subsidiaries and a share pledge granted
over such newcos to create a single point of enforcement; and
Security over all Restricted Group vessels and concessions (other than the La Esfinge Concession)
Security over all intercompany loans with SPVs of the Unrestricted Group
Security and guarantee package to replicate that provided to the ICA Security Parties, Bridge Facility and Vessels Facilities immediately prior
to the restructuring effective date in a single shared security and guarantee package
ICA Ranking
1st ranking: RCF and Super Senior Basket
2nd ranking: 1L TL, new Confirming Lines, Fuel Swap New Financing(2) and TM New Financing(2)
3rd ranking: 1.5L SSNs
Note
1. NewCos’ jurisdiction subject to completion of fiscal analysis and tax structuring
2. In case such financing is provided
15
Restructuring Key Terms (Cont.)
Key Considerations
Other
Debt
New Factoring
Lines
Instrument: New fully committed syndicated factoring lines
Amount: €50m. Up to €40m can be used for cargo and land transportation invoices
Maturity: April 30th, 2025
Interest: Euribor (floor 0%) + 2.75% for Government invoices / 4.00% for cargo invoices
Lenders: €31.1m Santander / Caixabank and Sabadell to be offered to participate in the factoring in the amount of €13.0m and
€5.9m respectively, and if they do not participate, the AHC will backstop their allocation
Security: Invoices from the Public Administration related to subsidies to residents and invoices from cargo clients with a high credit
quality
Agency fee: €100k paid in cash
Other
Unsecured
Debt (ICOs,
Crystallized
Fuel Swap, TM
Vendor Loan(1))
For lenders that provide new money
Option 1
Amount: Reinstatement at par
Interest: current terms
Maturity:
ICO Loans: the date resulting from adding 36 months to the final maturity date currently in force (up to máximum of 8 years since
inception of respective ICO loan). Amortization holiday period of 24 months
Cryst. Fuel Swap & TM Payment Arrangement: to be financially equivalent to the treatment received by the respective
instruments of other originally unsecured creditors, considering the specific circumstances of each creditor
Option 2
Amount: Full capitalization
Equity: Equivalent to 20.73% of proforma Class A shares and 27.5% of Class B shares. Shares to be split between unsecured
creditors based on their pro rata holdings of unsecured claims, which shall include the capitalized portion of the Uncovered Existing
SSNs(2)
For lenders that do not provide new money
Amount: Reinstatement at a range of 20 – 30c(3)
Interest: current terms
Maturity: 7.5 years bullet
Santander has committed to provide €43.5m of new working capital lines
Notes: (1) Acciona holds two claims to be contemplated in relation with the Homologation: TM Vendor Loan and Acciona Litigious Claim. Acciona Litigious Claim to only have recourse against the relevant Obligors (and thus become affected by Homologation)
should a civil court declare that it is owed by Bahía de las Isletas, Anarafe and / or any of the Obligors. Options only available for TM Vendors Loan. Acciona Litigious Claim will be granted voting rights ad cautelam (i.e. to be also taken into account prima facie for
majority calculation purposes), but only acknowledged other rights under the MRA if and when such civil court passes an enforceable declaratory judgment recognizing the underlying claim against Bahía de las Isletas or any other company within the Group.; (2)
Further detail can be found on LuA Annex 2; (3) Definitive haircuts and treatments to be determined taking into account updated viability plan and security valuations, as well as existing visibility on alternatives chosen by Consenting Creditors.
16
Equity and Governance
Key Considerations
Board of
Directors
The board of New HoldCo shall at all times be comprised of up to a maximum of 5 directors, namely:
1 executive chairman (who shall be Mr. Antonio Armas as at the Restructuring Effective Date);
1 executive director, being the CEO(1);
1 non-executive director appointed by the Existing Shareholders ; and
2 independent non-executive directors appointed by the two largest Creditor Shareholders
Executive
Management and
Responsibility
Matrix
Search process to be run for management positions
Upon appointment of a General Manager/CEO and until the end of 2022, certain key areas of the Group will be managed by Mr. Antonio
Armas, as Executive Chairman, with the remaining being under the responsibility of the General Manager in accordance with a responsibility
matrix
Mr. Antonio Armas to work on a transition to the General Manager during 2022. Mr. Armas will remain as Chairman of the Board after the
transition
Equity
Distribution
Voting ordinary shares (“Class A shares”) to be split 51% for Existing Shareholders, 43.35% for existing SSN holders and 5.65% for 1L Term
Loan lenders
Economic (“Class B shares”) to be split 35% for Existing Shareholders. 57.5% will be distributed between existing SSN holders (30%),
unsecured lenders (including the existing SSN holders) that provide new money (27.5%) and 7.5% for 1L Term Loan lenders.
The existing SSN holders have agreed between themselves to turnover or re-allocate their entitlements of the Class A Shares and Class B
Shares on a pro rata basis as between all existing SSN holders.
Once existing SSN holders have been paid par + accrued interest on the face value of their existing SSNs at an exit date / liquidity event,
excess value flowing to equity holders to be split 50% for Existing Shareholders, 42.5% for existing SSN holders and 7.5% for 1L Term Loan
lenders
Capital Increase Existing Shareholders to inject €40m
Exit Board to launch a sale process of the Group until March 2024, which shall happen earlier in case the Group achieves a consolidated
EBITDA of €100m
Current Shareholder has committed to inject €40m as part of the Restructuring
Notes
1. If the CEO is not appointed by the Restructuring Effective Date, that Board position shall be filled by an independent non-executive director (the “Interim INED”) until such time as the CEO is appointed
17
Liquidity Under the Plan
Total of
€218.5m
While operations will remain very challenged in 2021 given Covid19, the transaction will provide sufficient liquidity from a number of different
sources. Liquidity does not take into consideration additional WC alternatives that could be obtained through the different baskets
(2)
Notes
1. Related to the sale of Villa de Teror vessel
2. Excludes potential divestments and Other CF line detailed in slide 7
3. Includes EoP cash balance and available WC lines
Impacted by the regularization of c.€100m of overdue(127)
3
(14)
48
54
30
7
37
(140)
(90)
(40)
10
60
1H2021 2H2021 1H2022 2H2022
CFADS Available LiquidityCompany’s liquidity is impacted
by seasonality in summer
months
Sources of Cash:
€100m New Money (€35m already
injected in December 2020 and €8m in
January 2021)
€70m new WC Lines
€40m shareholder capital increase(1)
€8.5m from an IC Loan from Villa de
Teror(1)
(3)
18
Simplified Post-Restructuring Corporate
Structure
Naviera Armas, S.A.Compañía
Trasmediterránea S.A.Other Subsidiary OpCos
Other OpCos
Other HoldcosOther Holdcos
OpCos
Vessels SPVs
Bahía de las Isletas, S.L.
Anarafe, S.L.U.
€m
La Esfinge Loan 13.1
ICO Loans TBD(5)
New Confirming TBD(5)
New Factoring TBD(5)
Cryst. Fuel Swap TBD(5)
Total TBD
Current Shareholders1L TL and 1.5L SSNs
lenders(3)Total Vessels
€651m(4)
€m
RCF 38.1
1L Term Loan 206.5(7)
1.5L SSNs 366.2(6)
TM Vendor Loan TBD(5)
Total TBD
NewCo 1
NewCo 2
51%35%(1)49% 65%(1)
50%(2) 50%(2)
Holding Company
Operating Company
SPVs
La Esfinge Loan Collateral
Voting Rights
Legend
Luxembourg entity
Spanish entity
ICA Facilities share pledge
ICA Facilities pledged vessels
Economic Rights
Notes: (1) Until the Existing Noteholders are paid Par + Accrued Interest (as detailed on Footnote 2 on page 13) up until the repayment date; (2) Once the Existing Noteholders are paid Par + Accrued Interest (as referenced on Footnote 2 on page); (3) Refers to lenders of existing 2023 / 24
Senior Notes; (4) Alta Shipping latest valuation as of 5th of November, 2020. Additional valuation performed by FEM Shipbrokers shows a €600m valuation of the Group’s vessels as of 24th of November, 2020; (5) Post-Restructuring amount will depend on option taken by the creditors; (6)
An additional amount of 1.5L SSNs may be issued in discharge of certain advisers fees; (7) Includes €185m principal (includes illustrative assumption that the €25m Facility D is fully drawn at the completion of the Financial Restructuring) plus fees and accrued interest assuming completion
of the Financial Restructuring at 30 June 2021
€123m(4)€85m(4) €234m(4)
€199m(4)
€11m
€m
ICO Loans TBD(5)
New Confirming TBD(5)
New Factoring TBD(5)
Cryst. Fuel Swap TBD(5)
Total TBD
1
5 5
6
5
19
Lock-up Accession Instructions
• Noteholders not already party to the Lock-Up Agreement are invited to accede.
• Lucid Issuer Services Limited has been engaged to act as Lock-Up Agent under the Lock-Up Agreement. Any Noteholder that would like to
accede to the Lock-Up Agreement will need to provide to the Lock-Up Agent:
• a duly executed accession letter or, if participating in Facility B2 and Facility D (see below for further details) of the up-sized Bridge
Facility, a duly executed accession and commitment letter; and
• a locked-up debt confirmation letter and its evidence of beneficial holding,
via www.lucid-is.com/navieraarmas as soon as possible and, in any event, by the deadlines set.
• Any Noteholder that would like to accede to the Lock-Up Agreement during the Subscription Period will need to instruct the Clearing
Systems to block their Notes.
• Lenders are invited to contact the Lock-Up Agent at www.lucid-is.com/navieraarmas or by email to [email protected] for further
information regarding the Lock-Up Agreement accession process.
Participation by Noteholders in Facility B2 and Facility D of the Bridge Facility
• The Ad Hoc Committee have agreed to backstop €25m of post-Restructuring working capital facilities which will be included in the Bridge
Facility as Facility D if certain working capital facilities lenders do not accede to the Lock-Up Agreement. With regards to availability and
utilisation:
• Facility B2 (€57m), which shall be provided in any event, will be utilised by the Group prior to completion of the Restructuring as
necessary to address the Group’s immediate liquidity needs; and
• Facility D (€25m), if provided, shall be committed to the Group as part of the Bridge Facility, but is not expected to be available to
the Group for utilisation until the completion of the Restructuring.
• If certain working capital facilities lenders accede to the Lock-Up Agreement, Facility D will not be required, shall not be documented or
made available for participation and the syndication process shall proceed in respect of Facility B2 only.
• Noteholders are invited to participate in Facility B2 and Facility D (if applicable) of the Bridge Facility. Participating Noteholders will be
allocated a proportion of Facility B2 commitments and Facility D commitments (if applicable) such that their total participation in the Bridge
Facility is equal to the proportion which their holdings of Notes bears to the aggregate of all Notes issued. If Facility D is provided,
Participating Noteholders will not be able to elect to participate in only one of Facility B2 or Facility D.
• Each Participating Noteholder will need to provide a duly executed and apostilled power of attorney to accede to the Bridge Facility. Further
information and instructions are available at www.lucid-is.com/navieraarmas.
20
Timeline and Key Milestones
Notes
1. Noteholders are invited to participate in Facility B2 and Facility D (if applicable) of the Bridge Facility. Participating Noteholders will be allocated a proportion of Facility B2 commitments and Facility D commitments (if applicable) such that their total participation in the
Bridge Facility is equal to the proportion which their holdings of Notes bears to the aggregate of all Notes issued. If Facility D is provided, Participating Noteholders will not be able to elect to participate in only one of Facility B2 or Facility D. Notwithstanding this, the
AHC has agreed to backstop Facilities B2 and D; (2) This is based on a six-week timetable from the date of the Lock-Up Agreement to agree the Master Refinancing Agreement and all long-form debt and equity documents; (3) Under Spanish law, the Court Order is
required to be published 15 business days after the Master Refinancing Agreement is sanctioned; (4) Under Spanish law, the challenge period lasts for 15 business days after the publication of the Court Order; (5) It is anticipated that the restructuring will be
implemented prior to the end of the challenge period and that the RED will occur as soon as practicable after publication of the Court Order
All dates are indicative only, subject to ongoing co-operation from key stakeholders and their respective advisers and are based on anticipated
timeframes where key events are driven by the Spanish Court
As soon as practicable after
Publication of Court Order(5)
Workstreams March April May June July
Week Commencing 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19
Key Events to Closing
Execution of Lock-Up Agreement 2
Accesion Period(1) 1 1 1 2
Signature Documentation(2) 2
Presentation Homologación 2
Approval Homologación 1 1 1 1 1 1 1 1 1 1 1 1
Court Order(3) 2
Challenge Period(4) 1 1 1 1
Restructuring Effective Date
Legend
Process 1 1
Key Event 2 2