Orrick Assists in Restructuring of Leading French Digital Media Group SoLocal

March.22.2017

Orrick assisted GLAS Trust Corporation Limited in the recent financial restructuring of SoLocal Group S.A., the leading French provider of digital local media and marketing.

The main creditors involved were the lenders of around €835 million in senior secured bank debt and the holders of €350,000,000 8.875% senior secured notes due 2018 (the “Notes”). The restructuring agreed between the company, its shareholders and its creditors involved a partial cash prepayment of debt and a swap for new notes, warrants, convertible notes and equity. Shareholders received three free shares for every two existing ones held. Overall, the restructuring resulted in a two-thirds reduction in debt (from €1.158 billion to €398 million) and greatly reduced leverage ratio.

A London-based Orrick team assisted GLAS with the restructuring of the Notes, which had been issued through a “back-to-back” structure. Working with SoLocal and the ad hoc creditors committee, the back-to-back structure was collapsed by way of the consensual enforcement by GLAS (as security agent) of a French law pledge of receivables of the proceeds loan. This resulted in GLAS becoming a creditor of SoLocal Group S.A. under the proceeds loan, thereby giving holders of the Notes a more direct nexus with the restructuring and access to the restructuring consideration to be distributed under the French law accelerated financial safeguard plan.

The Orrick team included Stephen Phillips, Scott Morrison and Jack Mead on the restructuring aspects of the deal, and Sushila Nayak on the New York high yield aspects of the deal.