Frigoglass Group announces agreement to issue new Senior Secured Notes

Athens, Greece, 31/10/2024. – Frigoglass Group announces that it has entered into a definitive agreement to issue and sell €20 million in aggregate principal amount of 4% Cash Interest and 11.5% PIK Interest Senior Secured Notes due 2026 (the “New Senior Secured Notes”) (the “Transaction”) to be issued by Frigo DebtCo plc (the “Company”).

The Transaction will be implemented with the support of the holders collectively holding (i) over 80% of the aggregate principal amount of the Company’s €75 million senior secured notes due 2026 (the “Existing Senior Secured Notes”) and (ii) over 70% of the aggregate principal amount of the Company’s €150 million second lien senior secured notes due 2028 (the “Existing Second Lien Notes”) (the “Noteholders”).

On 30 October 2024, the Company entered into a notes purchase agreement (the “Notes Purchase Agreement”) for the sale and issuance of the New Senior Secured Notes.

The proceeds of the New Senior Secured Notes will be used to fund the cash interest payment due on 1 November 2024 on the Company’s Existing Senior Secured Notes and Existing Second Lien Notes, fund upcoming working capital and capital expenditure requirements to continue its business operation and support the Group’s growth plans.

Commenting on the agreement to issue New Senior Secured Notes Gagik Apkarian, Founder and Managing Director of Tetrad Capital Partners and Chairman of Frigoglass Group BoD, stated: "In partnership with the company’s major stakeholders we commenced an aggressive transformation of Frigoglass upon the successful recapitalization and restructuring of the Group in April 2023. The first phase of our effort was focused on stabilising the Group, regaining its credibility given some of its prior challenges, creating value across all facets of its businesses, and communicating that value. This new incremental funding, with the support of the Company’s major bondholders, is a validation of the success of that 18-month long effort. Moving forward, we will leverage the momentum that has been built to accelerate top line growth, enhance profitability and further strengthen the strategic position in the group’s two operating segments, and pivot at the appropriate time towards the value realization phase of our plan."

The requisite majority of the holders of the Existing Senior Secured Notes and Existing Second Lien Notes have consented and approved, and the Company (and certain entities in the Frigoglass Group) has agreed to enter into on the Closing Date (as defined below), amongst other documents:

• an indenture for the issuance of the New Senior Secured Notes;
• supplemental indentures amending and supplementing the terms of the indentures governing the Existing Senior Secured Notes and the Existing Second Lien Notes; and
• an additional intercreditor agreement (the “Additional Intercreditor Agreement”) to the existing intercreditor agreement to establish the priority of the holders of the New Senior Secured Notes with respect to the receipt of the proceeds from enforcement, and certain disposals of the collateral,

in each case, to implement the issuance and sale of the New Senior Secured Notes.

As of the completion of the Transaction, which is expected to be implemented on or about 31 October 2024, (such date being the “Closing Date”):

• the Company will issue the New Senior Secured Notes with an interest rate of 4% in cash plus 11.5% PIK, which will be paid and/or accrued semi-annually.
• The New Senior Secured Notes will be issued utilizing existing debt capacity within the documentation governing the Existing Senior Secured Notes and Existing Second Lien Notes
• The New Senior Secured Notes will be (a) pari passu with the Existing Senior Secured Notes and will, within 20 Business Days from the Closing Date, be secured on the same collateral as the Existing Senior Secured Notes subject to agreed security principles and certain perfection requirements; and (b) subject to a priority mandatory redemption, subject to certain permitted deductions, using net proceeds of certain asset disposals in the Group’s commercial refrigeration and glass packaging segments.
• No later than 20 Business Days from the Closing Date, certain subsidiaries of the Company will accede to the Notes Purchase Agreement and the indenture governing the New Senior Secured Notes as guarantors of the New Senior Secured Notes, subject to certain limitations under applicable law.
• The existing intercreditor which establishes the relative rights of the creditors of the Company (amongst others) and the priority of the proceeds of the collateral which secures the Existing Senior Secured Notes, the Existing Second Lien Notes and certain other indebtedness will remain in place alongside the Additional Intercreditor Agreement.

Further Information

Further information regarding the Transaction and our business plan are available on our website: https://www.frigoglass.com.

Frigoglass will make further announcements in due course and as appropriate.

Reed Smith LLP have acted as international counsel to Frigoglass Group, while Weil, Gotshal & Manges LLP have acted as international counsel to the Noteholders in this Transaction.