Atrys Health will request the bondholders' syndicate to amend the terms of the bonds to unify the convertible bond issuances of December 2023 (€13.3 million) and May 2024 (€11.7 million), i) extending the maturity of both bonds to 30 September 2033 and the voluntary conversion period to 31 March 2033; ii) modifying the interest rate, which will become 8.50% per annum (4.0% will be paid in cash and the remaining 4.50% will be paid in cash or capitalised in PIK format at Atrys' discretion); iii) the conversion price will be reduced from €7 to a minimum of €3.25 per share; and iv) the bonds will be subordinated to a new long-term Senior Financing that the Company is negotiating.
Additionally, the company will redeem the 2020 issuance, maturing on 17 November, with €7 million of principal and €1.26 million for capitalised interest and the last cash coupon. To this end, the Company has reached an agreement with The Nimo's Holding (a company linked to director D. Josep Mº Echarri) for a bridge loan of €8 million, with a cost of Euribor 3m+3.5% (6.25%) and a maximum maturity of 31/12/2026 (extendable) if the comprehensive debt reorganisation operation is not closed before then.
This is positive news, and we hope the proposal will be accepted by the bondholders' syndicate (a favourable vote of 2/3 is needed), extending the company's maturity schedule and alleviating short-term liquidity needs while negotiating a much larger long-term senior refinancing.
On the negative side, the refinancing of the convertible bonds with a conversion price of €3.25 per share represents a greater dilution risk for shareholders.
For all these reasons, we believe that the real success of the operation will be determined by Atrys' ability to generate positive operating cash flow in the coming years, allowing it to finance the higher cost of the bonds and the senior refinancing, for which we expect the company to provide greater visibility on its business prospects by holding an Investor Day in the coming months.
