Announcement on application for receipt of the Bondholders consent for amendments to SIA L. J. LINEN Terms of the Bonds Issue
In accordance with the Terms of the Bonds Issue of SIA L. J. LINEN, registration number: 40003669025 (hereinafter the “Issuer”), dated 13 December 2022, ISIN: LV0000850071, (hereinafter “Terms of Issue”), the Issuer hereby informs about the following changes and requests to receive the necessary approvals from the Bondholders and, to the extent required by Terms of Issue approval from the Collateral Agent, in order to proceed with the amendments to the Terms of Issue.
The definitions used in this announcement shall have the same meaning as in the Terms of Issue.
Anticipated changes and justification:
Intended increase of the credit line with AS Signet Bank
Issuer informs about the anticipated increase of credit line with AS Signet bank (40003043232) with up to EUR 3 million. As a result of this, the claim amounts of the first rank commercial pledges (Bank Loan Collaterals) on assets and shares of SIA L. J. LINEN, Arowana Exim PTE and Lionpro PTE will be increased to EUR 6 million for each. The Issuer has the right to additionally prolong and to increase the existing credit line after one year and register the related changes to claim amounts of Bank Loan Collaterals.
Since the Collateral of the Bonds held by the Collateral Agent on behalf of the Bondholders has a subsequent (second) ranking to the commercial pledges granted in favour of AS Signet Bank, the Issuer has the right to request the Collateral Agent to grant approval to register the changes for first rank commercial pledges (Bank Loan Collaterals) as described above.
In the opinion of the Issuer, the additional credit line with AS Signet Bank and related increase of claim amounts to Bank Loan Collaterals does not affect the fulfilment of the Financial covenants and General covenants by the Issuer, and would help Group (see Schedule No 3) to grow and follow the presented budgets and plans. This relatively low cost financing will be invested in working capital in order to expand existing and new operations and will significantly increase total amount of pledge.
Intended changes in the shareholder structure
As a result of these changes Jānis Kuļikovskis will switch from direct to indirect shareholder of the Issuer. The reorganization process within the Group entities will not change the UBO, this will remain the same – Jānis Kuļikovskis.
Issuer informs that to complete the overall reorganisation plan of the Group with the goal to create a clear Group structure with separated business lines that was presented to the Bondholders and Collateral Agent already prior to the Bonds issue, the shareholder of the Issuer (SIA L. J. LINEN) will be changed from Jānis Kuļikovskis (personal identity code: 260183-10644) to Related Entity Lionpro B.V (863955344, incorporated in the Netherlands) which is fully owned (100%) by SIA Jaze Capital Holdings (registration number: 40203480428) . In turn, the sole shareholder of SIA Jaze Capital Holdings is Jānis Kuļikovskis (personal identity code: 260183-10644). The purchase of shares of the Issuer will be made at a nominal value and independent consultant’s opinion (Ernst&Young) has already been received on tax matters of the transaction (which may be issued to Bondholders upon request). Issuer confirms that this transaction has no monetary or tax effect on the Issuer’s financial situation, as well as has no impact on Financial covenants and General covenants defined in Terms of Issue.
Issuer informs that based on the reorganization plan, Lionpro PTE guarantee and commercial pledge on assets will be replaced by related party SIA LIONPRO Nutrition (reg.no. 40203453472) guarantee and commercial pledge on assets. SIA LIONPRO Nutrition would fully take-over all the liabilities and claims that are under Lionpro PTE. The proposed change is necessary due to the fact that it is planned to exclude Lionpro PTE from the Issuer’s Group and bring all the transactions and daily operations to SIA LIONPRO Nutrition.
The presented changes are technical in its nature and in any way, do not affect the fulfilment of the Financial covenants, General covenants and any other obligations of the Issuer set in the Terms of Issue.
The Issuer’s existing Group structure and visualisation of Group post-reorganization is attached to this announcement as Schedule No 3.
Proposed amendments to the Terms of Issue:
Amending definition “Permitted Security”;
Amending Clause 6.2.5. “General Covenants”;
Supplementing Clause 4.2.6. “Guarantors”.
Full version of the amendments to the Terms of Issue are attached to this announcement as Schedule No 1.
Terms of voting:
According to the Terms of Issue the list of Bondholders will be inquired as of 19 October 2023. The Bondholders included in the respective list will be eligible to vote for the anticipated amendments to the Terms of Issue.
The Bondholders or their representatives shall submit their vote until 1 November 2023 by filling the voting form which is attached herein as Schedule No 2 and submitting the signed form to: firstname.lastname@example.org . The Bondholders have the right to submit their vote themselves or by mediation of their legal representatives or authorized persons (in case represented by authorized person, the power of attorney shall be submitted).
About L. J. LINEN:
LINEN is engaged in the sale of animal by-products and the provision of a tailored agricultural supply chain to market leaders. LINEN provides a seamless, full-cycle door-to-door sales and delivery service - the company is as a bridge between raw material producers and producers of animal feed, biofuels and human food. LINEN’s shareholders have in-depth knowledge and expertise in the sale of these components, gained in almost 30 years of experience and working with clients in 46 markets. The company is a supplier to some of the world's largest animal feed manufacturers and is one of the largest exporters of these ingredients to developing countries.
Monta Tija Brakovska
SIA “L. J. LINEN”
Phone: (+371) 29942431