Atlas Copco to launch consent solicitation to certain noteholders
May 23, 2017
Stockholm, Sweden, May 23, 2017: Atlas Copco AB intends to launch a consent solicitation to holders of notes issued under its Euro Medium Term Note Program in connection with the potential split of the Group in 2018.
Consent solicitation Atlas Copco intends to announce an invitation to holders of notes issued under its Euro Medium Term Note (EMTN) Program to consider waiving and amending certain terms and conditions of the notes in connection with the announced potential split of the Group in 2018. Background On January 16, 2017, Atlas Copco’s Board of Directors announced that it will prepare a proposal to its Annual General Meeting in 2018 (expected to be held in April 2018) to split the Group into two companies: Atlas Copco, focused on industrial customers, and Epiroc, focused on mining and civil engineering customers. Atlas Copco is seeking to ensure there is no possibility of an event of default occurring or being deemed to occur in connection with or as a result of the potential split. Capital structure Atlas Copco’s policy historically, as illustrated by its net debt/EBITDA ratio over the last ten years, has been to have a capital structure which maintains investor, creditor and market confidence and supports the future development of the business. Assuming that the Annual General Meeting 2018 approves the split, the plan is to continue with the same policy for Atlas Copco following the split. The expectation is that the net indebtedness of the Atlas Copco Group will be allocated between Atlas Copco and Epiroc approximately corresponding to their respective profitability (operating profit and EBITDA) and cash flow metrics (operating cash flow). This is aimed at ensuring that Atlas Copco will continue to have a strong financial profile, consistent with the past. If the split is approved, Atlas Copco’s outstanding notes will remain with Atlas Copco and some other Group debt will be allocated to Epiroc. Selected illustrative financial information of Atlas Copco after the split In connection with the consent solicitation, Atlas Copco has prepared the following unaudited selected illustrative financial information of Atlas Copco after the split to provide additional information for the noteholders. The unaudited selected illustrative financial information of Atlas Copco after the split gives effect to the split as if it had been completed as described in the full selected illustrative financial information of Atlas Copco after the split, which is attached.
- Revenues of BSEK 74.1 in 2016, BSEK 70.1 in 2015 and BSEK 20.6 in the first quarter of 2017
- EBITDA(*) (1) of BSEK 18.3 in 2016, corresponding to an EBITDA margin(*) of 24.7%
- Operating profit(*) (2) of BSEK 15.3 in 2016 (BSEK 14.7 in 2015), corresponding to an operating profit margin(*) of 20.7% (21.0% in 2015)
- Net cash from operating activities(*) (3) of BSEK 13.0 in 2016
- Cash flows from investments in PPE and intangible assets(*) (4) of BSEK -1.6 in 2016
- Total assets of BSEK 87.6 as at December 31, 2016
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Atlas Copco is a world-leading provider of sustainable productivity solutions. The Group serves customers with innovative compressors, vacuum solutions and air treatment systems, construction and mining equipment, power tools and assembly systems. Atlas Copco develops products and services focused on productivity, energy efficiency, safety and ergonomics. The company was founded in 1873, is based in Stockholm, Sweden, and has a global reach spanning more than 180 countries. In 2016, Atlas Copco had revenues of BSEK 101 (BEUR 11) and about 45 000 employees.