Dutch retail group HEMA is to be taken over by its senior secured noteholders (SSNs) through a debt-for-equity swap.
The move comes after more than 85% of SSNs supported a debt restructuring announcement made by the company on 15 June.
“This is an important milestone towards the successful implementation of a transaction that will deleverage and strengthen the company’s balance sheet,” HEMA said in a statement. “The implementation process remains on track and is expected to complete in the coming months.”
Towards the end of the implementation process, HEMA group entities will be transferred to a new holding structure, controlled by the holders of the SSNs, and a competitive merger and acquisition process has been initiated, which is typical in a debt-for-equity transaction.
HEMA adds it is “confident” that it will be able to implement the recapitalisation transaction in the coming months. The merger and acquisition process will continue in parallel.
HEMA is a general merchandise retailer and sells apparel, food, home, and personal care products out of almost 800 stores in 12 countries on three continents, with more 19,000 employees.
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By GlobalDataThe announcement coincided with the group’s first-quarter results in which it booked a net sales decrease of 24.7% to EUR224.8m (US$253.1m). EBITDA slid 62.9% to EUR18m. It attributed the fall to the effects of Covid-19.
Tjeerd Jegen, CEO of HEMA, said: “After reaching an agreement with our key financiers, we have now taken another important step. We have been able to gather more than the necessary support from our bondholders to continue the process which will put HEMA on sound financial footing again.
“We are pleased to announce that our sales have also returned to normalised levels. The outbreak of the Covid-19 pandemic had a major impact on our financial results in our first quarter. By swiftly adapting our operations in the Netherlands as well as our ecommerce platform, we were able to benefit from increased online demand, and take immediate advantage from the recovery that began in mid-May. As a result, we clearly outperformed the rest of the market in the Netherlands. The recovery in our results continues in the second quarter.
“We made good progress with the implementation of our growth strategy. In accordance with our agreement with Jumbo, 39 Jumbo stores are now equipped with HEMA corners. We have further expanded our collaboration with Groupe Casino in France. In addition to the almost 100 shop-in-shops that were previously opened in cooperation with Franprix, we have now also concluded an agreement with parent company Casino.
“To date, we have opened nearly 20 shop-in-shops in super- and hypermarkets of Casino and Géant. With this strategy we aim to create more than 500 new HEMA outlets this year alone. This will significantly strengthen our position and scope in Europe and bring our ambition to grow into a global brand a step closer again.”
