CLISA's Consent Solicitation for Step-Up Senior Secured Notes

CLISA Initiates Consent Solicitation for Noteworthy Amendments

CLISA – Compañía Latinoamericana de Infraestructura & Servicios S.A. ("CLISA") has embarked on a significant financial maneuver by launching a consent solicitation aimed at its outstanding Step-Up Senior Secured Notes due 2027. This important process comes in light of the increasing pressures the company has faced recently.

Understanding the Consent Solicitation Process

CLISA is currently seeking consents from Noteholders concerning a series of proposed amendments to the terms of their existing notes. These amendments, which are documented in a consent solicitation statement, focus on revising aspects such as the principal amount and maturity timeline. Specifically, CLISA plans to adjust the aggregate principal to $270 million, with new maturities escalating to 2031 and 2034.

What Are the Proposed Amendments?

The amendments encompass several key changes, including modifications to the interest rate and scheduled payments, as well as the introduction of new collateral. These adjustments are vital for steering CLISA back to more stable financial waters in response to the pressures faced from the macroeconomic environment and significant drops in cash flow generation.

Impact of Economic Conditions on CLISA

The landscape for businesses in Argentina has been challenging, with CLISA's financial health deteriorating due to adverse economic conditions. Such difficulties have prompted the company to seek these amendments as a way to restructure its capital framework effectively. This strategy aims to better align the terms of the notes with the company's current cash flow capabilities.

Timeline and Conditions for the Solicitation

The consent solicitation is poised to end on a specified date, unless it is extended by CLISA based on prevailing circumstances. For the proposed amendments to pass, a solid consensus from 75% of the Noteholders is required. CLISA has already gained backing from several Noteholders who control a majority of the outstanding notes, expressing their intent to endorse the proposed changes.

Benefits to Noteholders

Should the requisite consents be successfully secured, CLISA plans to provide a consent consideration amounting to $25 million. This funding will partially originate from an equity contribution by its main shareholder. This essentially incentivizes Noteholders to participate in the consent solicitation.

Future Opportunities with New Notes

If all goes according to plan and the amendments become active, CLISA will issue new senior unsecured notes amounting to $70 million to eligible Noteholders. This will further lessen the existing notes by a similar amount, changing its maturity schedules accordingly.

Ensuring Compliance and Support

Through cooperation with various stakeholders, including the Information and Tabulation Agent, CLISA is establishing a structured approach for managing responses to this solicitation. This proactive effort demonstrates the company's commitment to navigate its financial challenges and work closely with its investors.

About CLISA

With over a century of experience, CLISA is recognized as a leader in Argentinian infrastructure management and development. The company strategically operates in several domains, such as construction, waste management, transportation, and water supply services, focusing primarily on serving public sector needs. Their extensive expertise positions them uniquely within the industry, even amidst economic fluctuations.

Frequently Asked Questions

What is the purpose of CLISA's consent solicitation?

The consent solicitation aims to acquire approvals from Noteholders for various amendments to CLISA's existing Step-Up Senior Secured Notes due 2027. This is crucial for restructuring the company's financial obligations.

How will these amendments affect the Noteholders?

The amendments are designed to enhance the terms of the notes, including changes to interest rates and maturity dates, which could potentially provide more stability and financial clarity for Noteholders.

When does the consent solicitation expire?

The consent solicitation is set to expire on a specified date in December, barring any extensions from CLISA based on circumstances at that time.

What financial challenges is CLISA currently facing?

CLISA has been grappling with deteriorating financial conditions largely due to adverse macroeconomic factors affecting Argentina, alongside reductions in their cash flow and adjusted EBITDA.

What is CLISA's strategy for recovery?

CLISA's approach involves implementing proposed amendments to its notes to stabilize its capital structure and better align with the existing cash flow generation capabilities.

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