Consolis Group Announces Comprehensive Recapitalisation Transaction

May 4, 2024

This announcement may include projections and other forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are based on current expectations and involve several known and unknown risks, uncertainties and other factors that could cause the Company’s or its industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward- looking statements. You should not place undue reliance on forward-looking statements and the Company does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise.

Compact Bidco B.V.
A. van Leeuwenhoekweg 38 D2 2408 AN
Alphen aan den Rijn
The Netherlands

Alphen aan den Rijn, The Netherlands.

Consolis Group Announces Comprehensive Recapitalisation Transaction
Compact Bidco B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (the “Company”, and together with its subsidiaries, the “Group”) is pleased to announce that it has agreed a comprehensive recapitalisation transaction (the “Transaction”) with its largest creditors, including a majority of holders of its €300m 5.75percent senior secured notes due 2026 (the “SSNs”) by value, all of its super senior Revolving Credit Facility (the “RCF”) lenders, all of the lenders under the PIK loan made to its indirect parent company (the “Holdco PIK Loan”), and certain affiliates of Bain Capital Private Equity, LP, the current ultimate shareholders of the Company (the “Sponsor”).

“The Consolis Group and its Management are delighted to have reached this significant landmark today in agreeing a comprehensive recapitalisation transaction and securing material new money. We are grateful for the support received to date from all of our stakeholders, including an ad hoc group of SSN holders, RCF lenders, Holdco PIK Loan lenders and Sponsor. Once implemented, we are looking forward to delivering our business plan in partnership with our future shareholders. The Transaction significantly strengthens the Consolis Group’s balance sheet and provides the business with ample liquidity, allowing us to maintain our market leading position and focus on the future ahead,” said Mikael Stöhr, President of the Consolis Group.

The Transaction
When completed, the recapitalisation is expected to refinance the Group’s existing capital structure, implement an extension of its super senior RCF, provide the Group with €115m of additional liquidity, and significantly deleverage its balance sheet.

The recapitalisation Transaction is expected to put the Group in a strong position with a robust capital structure to execute on its strategy and benefit from the market recovery.

No suppliers, customers, employees, other creditors, or stakeholders are expected to be impacted by the Transaction.

The key Transaction highlights are:

1. the provision of €70m of interim liquidity (the “Interim Facilities”), the first tranche of which has already been funded (the “Bridge Facility”) with a second tranche (the “Liquidity Facility”), expected to be funded by early June, subject to certain funding criteria being met. The Interim Facilities will provide the Group with sufficient liquidity while the Transaction is implemented;

2. the provision of €186m of new funding at close of the Transaction to the Group as a new senior secured facility (the “Exit Financing”). The proceeds of the Exit Financing will be used to refinance the Interim Facilities, refinance certain other facilities throughout the Group, and provide the business with €45m of additional liquidity to fully fund the Group’s business plan;

3. a significant deleveraging of the Group through a debt-for-equity swap of all of its SSNs and the removal of the PIK loan;

4. three year extension of the RCF maturity until 2028; and

5. a material reduction in cash pay interest payable by the Company to further improve liquidity and cashflow, used to fund investment into the business.

First Quarter Results
The Consolis Group today releases its Q1 2024 results, with the Company delivering adjusted EBITDA of €4.2 million. The market continues to remain challenging, with financial performance affected by the slow order intake in 2023, however management are witnessing a strong orderbook in Eastern Europe and green shoots of demand returning to the European residential market.

The Group’s quarterly results are available here: consolis.com/investors/reports-presentations/

The Restructuring Support Agreement
The Company entered a restructuring support agreement (“RSA”) with an ad hoc group of holders of SSNs representing in excess of a majority of SSNs by value (together the “AHG”), each of the super senior RCF lenders, the Holdco PIK Loan lenders and the Sponsor.

The RSA constitutes a key milestone for delivering the Transaction, with implementation subject to regulatory approvals, customary conditions, and completion of the required implementation steps.

The RSA provides customary terms committing the parties to supporting the Transaction. SSN holders will be eligible to:

1. receive an early-bird fee equivalent to 0.10 percent of the principal amount of their SSNs to all holders of SSNs who accede to the RSA on or before 24 May 2024 payable in cash on successful implementation of the Transaction;

2. receive a consent fee equivalent to 0.05 percent of the principal amount of their SSNs to all holders of SSNs who accede to the RSA after 24 May 2024 payable in cash on successful implementation of the Transaction; and

3. participate in providing their pro rata share of (i) the Liquidity Facility, provided they have delivered a Liquidity Facility participation letter (which will be issued through the clearing systems on 6 May 2024) to GLAS by 24 May-2024 and satisfied certain conditions and requirements set out in the participation notice that will be sent to SSN holders; and (ii) the Exit Financing provided they have delivered an Exit Facility Commitment Letter and satisfied certain conditions and requirements relating thereto. SSN holders who have participations in the Liquidity Facility will be rolled on a cashless basis into the Exit Facility.

The Liquidity Facility and Exit Financing have been fully backstopped by the AHG, who have also fully funded the Bridge Facility.

The Company invites all holders of SSNs who wish to access further information relating to the Transaction, accede to the RSA and participate in the provision of the Liquidity Facility and Exit Financing to contact GLAS via email at lm@glas.agency

The Group’s financial adviser is Lazard & Co., Ltd and its legal adviser is Kirkland & Ellis International LLP.

The AHG’s financial adviser is Perella Weinberg Partners and their legal adviser is Akin Gump Strauss Hauer & Feld LLP.