Flooring group Victoria is looking to reduce its debt by €75m (£65.48m) by swapping some of its bonds.
It has proposed swapping the €250m of its 3.75% senior secured notes due in 2028, of which €166.6m is outstanding, for new bonds.
These will pay 12% a year and be due in 2031. Victoria is offering €525 per €1,000, with a €52 per €1,000 bonus if agreed by 3 October. The proposal closes on 20 October.
The group says its ongoing cash interest costs could be cut by up to €6.2m a year.
‘This will further strengthen the company’s capital structure and improve near-term cashflow for the benefit of all stakeholders as the company drives operational improvements through the trough of the cycle. Management’s immediate focus remains on delivering self-help initiatives outlined at the recent full year results (which once complete are expected to deliver £70m annual EBITDA improvements vs FY2025), generating cash to deleverage, and rebuilding the company’s credit rating,’ it says.
‘The exchange provides the company’s 2028 noteholders with an attractive opportunity to increase the coupon, covenants and ranking of their existing notes, whilst strengthening the underlying business’s capital structure, reducing its ongoing cash interest cost and reducing maturity risk. This additional financial flexibility gives Victoria the capacity to invest in growth and profitability improvements for the benefit of all stakeholders. The board remains confident in delivering sustainable performance and creating long-term value through delivery of our self-help initiatives,’ says Alec Pratt, Victoria cfo.
The swap proposal does not apply to other categories of Victoria’s bonds.
