Intrum enters into lock-up agreement with majority of its RCF lenders continuing significant progress towards recapitalisation

Intrum AB (“Intrum” and together with its subsidiaries, the “Group”) today announces that it has entered into a binding agreement with revolving credit facility lenders who hold approximately 75.6% of the debt under its revolving credit facility agreement (the “RCF”) (the “RCF Lenders”). This agreement supports an amendment and extension of the RCF in the context of the Recapitalization Transaction previously announced by Intrum on 11 July 2024. The RCF Lenders have become party to Intrum’s existing Lock-up Agreement (as amended and restated to cater for the terms agreed with the RCF Lenders), the original key terms of which were announced on 11 July 2024.

This is another significant milestone for the Group as it progresses towards a comprehensive and value maximising Recapitalisation Transaction, which is the right step to significantly improve and strengthen Intrum’s capital structure without impacting the Group’s business relationships, operations, suppliers and employees.

Reference is made to the press releases issued by Intrum AB (“Intrum” and together with its subsidiaries, the “Group”) on 11 July 2024, announcing Intrum’s entry into a binding Lock-up Agreement with certain of its noteholders, and 30 July 2024, announcing that Intrum had extended the Early Bird Consent Fee Deadline under the Lock-up Agreement (together, the “Announcements”). Unless given a different meaning in this announcement, terms defined in the Announcements have the same meaning when used herein.

Revolving Credit Facility Amendment and Extension

Intrum is pleased to announce that it has agreed an amendment and extension of the RCF with the RCF Lenders on the following terms:

• An extension of the term of the RCF to 30 June 2028. The RCF also benefits from a springing maturity right if certain covenants relating to temporally senior debt are not complied with;
• A reduction of the overall RCF amount from €1.8bn to €1.1bn. This additional headroom is unutilised by the Company and, as such, the reduction shall take place in the coming days without any impact on the Group’s liquidity;
• A revised margin ratchet of between 3.75% to 2.55% based on the net leverage ratio;
• An upfront fee of 3.93125% payable in cash on the restructuring effective date;
• A substantially enhanced covenant package, which will limit Intrum’s ability to incur priming debt within the Group or extract value from the Group, and will require Intrum to use proceeds of the New Money Notes and excess cash to continue to delever its capital structure;
• A significantly improved guarantee and collateral package, whereby the RCF will be guaranteed by all material subsidiaries within the Group and will benefit from security over all material assets of the Group on a 1st lien basis; and
• Certain amendments to the cash flow waterfall and permitted application of proceeds of New Money Notes (to that set out in the Lock-up Agreement announced on 11 July 2024).

Any RCF Lender who accedes to the Lock-up Agreement on or before the Lock-Up Deadline will be entitled to receive a fee of 0.5% of its share of the €1.1bn RCF Commitments upon the earlier of (i) launch of any court-based restructuring process and (ii) 29 November 2024 and a further 0.5% upon the restructuring effective date. Alternatively, if no court-based restructuring process is required and implementation takes place prior to 29 November 2024, a total 1% will be payable on the restructuring effective date.

The RCF Lenders’ accession to the Lock-up Agreement and the amendments to the Lock-Up Agreement are subject to certain conditions precedent which are within Intrum’s control and which it expects to satisfy in the coming days (including the reduction of RCF commitments to €1.1bn).

Lock-up Agreement Terms & Locked-Up Noteholder Update

The Lock-up Agreement sets out the key agreed terms of the Recapitalisation Transaction. The Lock-up Agreement obliges each of the parties (including those that become party to it later) to take actions and provide such approvals as required to implement the Recapitalisation Transaction, subject to the terms of the Lock-up Agreement.

Now that the RCF Lenders have become party to the Lock-up Agreement, subject to limited exceptions, no further changes to the economic terms of the Recapitalisation Transaction will be able to be made without the consent of the Majority Participating Lenders (comprised by 66⅔% by value of the RCF Lenders).

The obligations of the parties under the Lock-up Agreement will automatically terminate on the earliest of:

• Closing of the Recapitalisation Transaction; and
• An agreed “Long-Stop Time” of 31 March 2025 (previously 30 June 2025), which shall be automatically extended to 31 May 2025 if a court-based restructuring process has been launched and remains ongoing as at 31 March 2025 and, as otherwise may be further amended with the consent of Intrum and a representative group of consenting creditors.

Parties to the Lock-up Agreement will have certain other permissions to terminate the Lock-up Agreement including in circumstances where the Recapitalisation Transaction is not capable of implementation prior to the Long-Stop Time or requisite consent thresholds are not reached.

Under the Lock-up Agreement, the relevant parties will negotiate to agree the implementation process most appropriate to secure successful implementation of the Recapitalisation Transaction, which may include a voluntary exchange, an English scheme of arrangement or restructuring plan under Part 26 or Part 26A (respectively) of the English Companies Act 2006, a Chapter 11 process in the United States or a Swedish reorganisation proceeding. Importantly, all implementation options under consideration are purely tools to facilitate comprehensive implementation of the Recapitalisation Transaction.

Implementation of the Recapitalisation Transaction remains subject to certain conditions, including documentation, obtaining regulatory and third-party clearances, and tax, accounting and certain other customary agreed conditions to closing.

As of the date of this announcement, Intrum is pleased to announce that c. 60% of its noteholders by value have now signed the Lock-up Agreement.

MTN Consent Fees

Please note that, under the Lock-up Agreement, the Company has introduced a deadline by which the requisite majorities of MTN holders must accede to the Lock-up Agreement in order to be eligible to receive their respective consent fees. As amended:

• All holders of MTNs subject to the Recapitalisation Transaction, in a particular issuance of MTNs, will be eligible to receive a fee of 0.75% of the principal amount outstanding under that MTN issuance if at least a majority of MTNs within that issuance consent to taking implementation steps to effect the Recapitalisation Transaction by signing or acceding to the Lock-up Agreement on or before the Lock-Up Deadline (as extended, please see below).
• All holders of MTNs subject to the Recapitalisation Transaction, in a particular issuance of MTNs, will be eligible to receive a further fee of 0.25% of the principal amount outstanding under that MTN issuance, if at least 90% of MTNs within that issuance consent to taking implementation steps to effect the Recapitalisation Transaction or the MTNs are otherwise subject to a court-based implementation process.

The above consent fees will be conditional upon the successful completion of the Recapitalisation Transaction.

Extension of Early Bird Consent Fee Deadline & Lock-Up Deadline

On 30 July 2024, Intrum announced its decision to extend the Early Bird Consent Fee Deadline. To provide additional time for noteholders to review the terms of the RCF amendment and extension, accede to the Lock-up Agreement and benefit from the Early Bird Consent Fee, Intrum has obtained consents of the requisite majorities under the Lock-up Agreement to further extend the Early Bird Consent Fee Deadline from 11.59 pm (London time) on 19 August 2024 to 11.59 pm (London time) on 27 August 2024. Holders of existing EUR notes should accede to the Lock-up Agreement prior to such time to be entitled to the Early Bird Consent Fee. Any noteholders who have already acceded to the Lock-up Agreement in accordance with its terms do not need to take any further action.

In addition, Intrum has obtained consents of the requisite majorities under the Lock-up Agreement to further extend the Lock-Up Deadline from 11.59 pm (London time) on 6 September 2024 to 11.59 pm (London time) on 16 September 2024.

Next Steps

Intrum encourages all its RCF Lenders and Noteholders to support the Recapitalisation Transaction and to accede to the Lock-up Agreement. RCF Lenders and Noteholders may find instructions on how to accede to the Lock-up Agreement by accessing Intrum’s website home page, or by accessing this link: https://www.intrum.com/investors/reports-presentations/lock-up-agreement/. If you experience any issues in accessing these instructions or the website they direct you to, or if your institution’s policies prevent you from completing and lodging documentation online, please contact the Information Agent at the email address below. Noteholders and RCF Lenders will be required to complete and execute an accession letter to the Lock-up Agreement and, in the case of Noteholders, provide evidence of their beneficial holdings to the Information Agent.

The Lock-up Agreement relates to senior unsecured notes and MTNs due 2025–2028 with the following identifiers (“ISIN”): XS2211136168 / XS2211137059; XS2034925375 / XS2034928122; XS2052216111 / XS2052216202; XS2566292160 / XS2566291865; SE0013105533; SE0013105525; SE0013104080; SE0013360435; XS2093168115.

For further information on the Lock-up Agreement, the Recapitalisation Transaction, and/or the Early Bird Consent Fee, please contact Houlihan Lokey who act as financial advisers to Intrum or PJT Partners who act as financial advisers to the noteholder ad hoc group at the email addresses below.

Contact Details

Kroll Issuer Services (as Information Agent): LD-intrum: intrum@is.kroll.com

Houlihan Lokey (as advisers to Intrum): Project_Indoor_HL@hl.com

PJT Partners (as advisers to the noteholder ad hoc group): Project_Impetus@pjtpartners.com

Media Inquiries:

Brunswick Group (as advisers to Intrum): intrum@brunswickgroup.com
Azadeh Varzi, Partner, Brunswick
Freya Semken, Director, Brunswick
+44 (0) 20 7404 5959

Hedda Söderström, Associate, Brunswick
+46 (8) 410 32 180
intrum@brunswickgroup.com

DISCLAIMERS

This press release was prepared solely for information purposes and should not be construed as a solicitation or an offer to buy or sell securities or related financial instruments. Likewise, it does not provide and should not be treated as providing investment advice. It has no connection with the specific investment objectives, financial situation or needs of any receiver. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Recipients should not consider it as a substitute for the exercise of their own judgement. All the opinions expressed herein are subject to change without notice.

No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained in this press release. Neither the Group nor any of its advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this press release or its contents.

This press release may include forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms as “believe”, “expect”, “anticipate”, “may”, “assume”, “plan”, “intend”, “will”, “should”, “estimate”, “risk” and or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the Group’s intentions, beliefs or current expectations concerning, among other things, the Group’s plans, objectives, assumptions, expectations, prospects and beliefs and statements regarding other future events or prospects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements reflect the Group’s current expectations, intentions or forecasts of future events, which are based on the information currently available and on assumptions made by the Group.

The forward-looking statements and information contained in this announcement are made as of the date hereof and the Group is under no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable laws. All subsequent written or oral forward-looking statements attributable to the Group, or persons acting on the Group’s behalf, included in but not limited to press releases, reports and other communications, are expressly qualified in their entirety by the cautionary statements contained throughout this press release.