Month: May 2024

Fortaco Group announces the successful completion of its Written Procedure to waive certain terms under the terms and conditions of the Bonds and certain security agreements

Fortaco Group Holdco Plc (the "Company") today announces the successful completion of the written procedure (the "Written Procedure") that was initiated on 10 May 2024 in relation to the Company's outstanding senior secured bonds due 2027 with ISIN NO0012547274 (the "Bonds"), regarding waiving certain terms under the terms and conditions of the Bonds and certain security agreements relating to, inter alia, the Bonds, as specified in the notice of Written Procedure dated 10 May 2024 (the "Proposal"). The last time and day for the holders of the Bonds (the "Bondholders") to vote in respect of the Proposal was 15.00 (CEST) on 27 May 2024.

In the Written Procedure, a sufficient number of Bondholders participated in order to form a quorum, and a requisite majority of the Bondholders voted in favour to approve the Proposal, i.e. (i) carrying out a divestment of the shares in Fortaco Zrt with a transaction structure consisting of inter alia: (A) converting certain group internal loans granted to Fortaco Zrt to equity contributions, (B) the Group acquiring certain equipment and giving Fortaco Zrt the right to use such equipment, without any compensation, while retaining full ownership until equipment is paid by Fortaco Zrt to the Group in full and (C) the granting of certain long-term loans to Fortaco Zrt, (ii) releasing the transaction security over seven real estate properties located in Finland for the purposes of facilitating a disposal of such properties, (iii) an asset sale whereby Fortaco Oy (being an obligor and subject to transaction security) will dispose of all or a substantial part of its assets, and (iv) carrying out certain mergers between members of the Group, in each case on the principle terms and as further described in more detail in the notice of the Written Procedure.

The waivers in respect of the Proposal shall be effective as per 27 May 2024.

For further information

Lars Hellberg

+358 40572 9488

lars.hellberg@fortacogroup.com

Categories: Stock exchange releases

by Fortaco

Fortaco Group Holdco Plc’s Business Review January–March 2024: Market demand remained soft – actions to improve efficiency progressing

This release is a summary of Fortaco Group Holdco Plc’s Business Review January–March 2024. The full release is attached and available on our website at https://investors.fortacogroup.com.

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period of the previous year.

Financial highlights: January–March 2024

Reported financials

Note: Comparison figures do not include MauserCABS and Buisard Cabins that were acquired
in Autumn 2023.

• Order intake was EUR 109.7 (96.1) million.
• Net sales were EUR 105.8(96.1) million.
• Recurring EBITDA was EUR 4.3 (8.2) million, i.e. 4.0 (8.5) per cent of net sales.
• EBITDA was EUR 3.2 (7.4) million, i.e. 3.1 (7.7) per cent of net sales.

Pro forma financials

Note: Pro forma financials are based on the “New Fortaco” scope, i.e. excluding the marine, energy and heavy project business that are under strategic review. Comparison figures are not shown as MauserCABS did not report intra-year financials prior to the acquisition by Fortaco.

• Pro forma order intake was EUR 99.4 million.
• Pro forma net sales were EUR 96.7 million.
• Pro forma Recurring EBITDA was EUR 5.2 million, i.e. 5.4 per cent of net sales.
• Pro forma EBITDA was EUR 4.2 million, i.e. 4.3 per cent of net sales.

Operational highlights

• In February, Fortaco announced it had started a strategic evaluation of its marine, energy, and heavy project businesses, while these three business sites are not considered strategic anymore.
• After the review period in May, the first part of the strategic review was completed as Fortaco announced the sale of its heavy project business in Jászberény, Hungary to Cyclus GmbH (50%) and Ask US Management s.r.o. (50%). Fortaco’s EBIT and equity were negatively impacted by the classification of Fortaco Zrt in Hungary to consitute asset held for sale and resulting an impairment loss of EUR 9.6 million during the review period. The estimated short-term negative cash-flow impact originating directly from the transaction is EUR 6.5 million. The business has been clearly loss making. During the last 12 months ending March 2024, the recurring EBITDA and EBITA losses from this business amounted to EUR -3.9 million and EUR -5.0 million, respectively. Additionally, the incurred non-recurring costs amounted to EUR 0.6 million during the same period. The transaction is subject to the approval of Fortaco’s bondholders and some customary closing conditions, and it is expected to be closed by the end of June 2024. For further information, please see the press release about the divestment, published on 10 May 2024.
• In March, Fortaco successfully placed a subsequent bond issue in the amount of EUR 25.0 million and by received an equity injection of EUR 10 million from the owner One Equity Partners.
• Strategic investment programs as well as efficiency and capacity alignment programs progressing.

Key figures

Fortaco Group key financials

Note: MauserCABS and Buisard Cabins included in the financials from the closing of the respective acquisition onwards (MauserCABS closing in September and Buisard Cabins in October 2023).

Guidance for 2024

Fortaco does not provide guidance for the financial year 2024.

Lars Hellberg, President & CEO comments

The market demand in Fortaco’s main markets remained soft in the first quarter of the year. Net sales increased by 10 per cent to EUR 105.8 (96.1) million, driven by the successful acquisitions of MauserCABS and Buisard Cabins in autumn 2023. The underlying market growth excluding the impact of the acquisitions was clearly negative. This was mainly due to the reduction of customer orders in most of Fortaco’s main market segments.

In the first quarter, recurring EBITDA was EUR 4.3 million, i.e. 4.0per cent of net sales. Excluding the marine, energy, and heavy project businesses that are under strategic review, recurring EBITDA was EUR 5.2million. The profitability was burdened by declining market conditions, losses incurred in the businesses that are under strategic review and negative currency impact due to strengthening Polish Zloty. We are continuing our actions to further increase the efficiency of operations, adjust capacity and improve profitability. We are also carrying out price increases to compensate for the inflationary pressures on our cost base.

OEMs (Original Equipment Manufacturers) and their distributors are still digesting their abnormally high inventories and the continuing geopolitical uncertainty, combined with the postponement of interest rate cuts by the central banks, are keeping our customers cautious and prolonging sales processes. However, our customer pipeline looks strong and we are confident that when the market situation improves, we will be in a good position to benefit from the ensuing growth.

Investing for growth

Fortaco continues to execute investments e.g. in a steel fabrication capacity in our new factory in Gliwice, expanding a vehicle cabin capacity in the Holic factory, Slovakia, and expanding operations in Narva, Estonia. These investments will support our strategy to expand technology offerings and to ensure we can serve our customers’ ever-expanding needs. At the same time, we are making our contribution to ensuring Europe has a competitive and future-proof manufacturing industry so we can grow and win together. These investments ensure that we can maintain our excellent delivery accuracy and have the needed capacity to fulfil our customers’ needs when the markets eventually pick up.

In March, we further strengthened our financial position by successfully placing a subsequent bond issue in the amount of EUR 25.0 million and by receiving an equity injection of EUR 10 million from the owner. The bond issue was met with a strong demand from primarily new and existing institutional investors based in the Nordics and continental Europe. Following the bond issue, the outstanding amount under the bonds is EUR 127.5 million.

A solid financial position enables us to carry out our expansion strategy, including the target of expanding our geographical footprint beyond Europe and extending our offering to cover new customer segments.

Strategic review progressing as planned

In February, we announced that Fortaco had started a strategic evaluation of its marine, energy, and heavy project businesses, while these businesses are not considered strategic anymore. In May, the first part ofthe review was completed as we announced the sale of our heavy project business in Jászberény, Hungary to Cyclus GmbH (50%) and Ask US Management s.r.o. (50 %). I’m happy that we have found a good new home for this business. The review regarding also the remaining business is proceeding as planned and the evaluation is still expected to be completed during the first half of 2024.

Getting ready for the Corporate Sustainability Reporting Directive (CSRD)

We are making good progress with our Sustainability Agenda that was launched in 2023. In the first quarter, the focus was on preparing the Group’s Climate Program and getting ready for the CSRD reporting by conducting a double materiality assessment. Fortaco’s Top 100 leaders have also been intensively trained in sustainability. Going forward, we are continuing to raise awareness of sustainability internally and externally, as well as creating a structure for sustainability-related processes.

Committed to deliver a solid financial performance in 2024

I’m happy to see the professionalism of the Fortaco team with our never-ending Make Tomorrow Safer and Better enthusiasm. Fortaco’s decentralised governance model enables business sites to run their daily operations independently and effectively. I’m confident that Fortaco is in a good position to take advantage of the emerging opportunities when the markets eventually pick up.And we are fully committed to delivering a solid financial performance also in 2024.

Events after the reporting period

On 10 May 2024, Fortaco announced the sale of the heavy project business in Jaszbereny, Hungary. The transaction is part of the strategic evaluation of Fortaco’s marine, energy and heavy project business announced on 28 February 2024.

On 10 May 2024 and connected to the above mentioned announcement, Fortaco called for a written procedure to request certain consents from its bondholders to execute needed actions as part of the strategic evaluation. The last day for voting in the written procedure is 27 May 2024.

Financial reporting in 2024

Fortaco publishes the Half-Year Review for January-June 2024 on Monday 26 August 2024.

Fortaco Group Holdco Plc
Board of Directors

Further information

Lars Hellberg

President & CEO
+358 40572 9488

lars.hellberg@fortacogroup.com

Kimmo Raunio

Senior Executive Vice President & CFO

+358 40593 6854

kimmo.raunio@fortacogroup.com

Categories: Stock exchange releases

by Fortaco

Supplementary information regarding Fortaco Group’s call for a written procedure and preliminary financial information regarding the sale of heavy project business in Hungary

On 10 May 2024, Fortaco Group Holdco Plc (“Fortaco” or the “Issuer”) announced it had instructed the agent for the Issuer’s senior secured bonds to initiate a written procedure to request the bondholders to vote in favour of certain transfers of value, granting of loans, releasing certain transaction security, the disposal of certain assets being subject to transaction security under the bonds and carrying out of certain mergers between members of the Group (the “Written Procedure“).

Due to a reguest from certain bondholders, Fortaco publishes the following preliminary financial information and other supplementary information regarding the Written Procedure and the strategic evaluation of some of its businesses:

On 10 May 2024, Fortaco announced the sale of its heavy project business in Jászberény, Hungary (Fortaco Zrt). The sale is part of the the strategic evaluation of Fortaco’s marine, energy, and heavy project businesses. The estimated short-term negative cash-flow impact originating directly from the sale of Fortaco Zrt is EUR 6.5 million. The business in Hungary has been clearly loss making. During the last 12 months ending March 2024, the recurring EBITDA and EBITA losses from this business amounted to EUR -3.9 million and EUR -5.0 million, respectively. Additionally, the incurred non-recurring costs amounted to EUR 0.6 million during the same period.

Fortaco will record an impairment loss (non-cash item) of EUR 9.6 million in its first quarter 2024 financials due to the classification of Fortaco Zrt to consitute asset held for sale. The transaction is still subject to the approval of Fortaco’s bondholders and some customary closing conditions, and it is expected to be closed by the end of June 2024.

As part of the strategic review and as announced in the release concerning the Written Procedure, Fortaco is contemplating to divest some operating assets of Fortaco Oy and certain non-core real estates in Finland. If completed, these potential divestments are expected to generate positive, one-off cash proceeds for Fortaco.

Fortaco will publish its January–March 2024 Business Review on 27 May 2024. Due to the silent period, Fortaco will not give any further comments on this matter before the publishing of Business Review.

Previous announcements

Fortaco’s Stock Exchange Release (10 May 2024): Fortaco Group calls for a written procedure

https://investors.fortacogroup.com/releases/fortaco-group-calls-for-a-written-procedure/

Fortaco’s press release (10 May 2024): Fortaco sells its heavy project business in Hungary
https://investors.fortacogroup.com/releases/fortaco-sells-its-heavy-project-business-in-hungary/

Fortaco’s press release (28 February 2024): Strategic evaluation of Fortaco’s marine, energy, and heavy project businesses ongoing

https://investors.fortacogroup.com/releases/strategic-evaluation-of-fortacos-marine-energy-and-heavy-project-businesses-ongoing/

For further information

Lars Hellberg

+358 40 572 9488

lars.hellberg@fortacogroup.com

Categories: Stock exchange releases

by Fortaco

Listing prospectus for Fortaco Group Holdco Oyj’s EUR 25 million subsequent senior secured bonds available; listing application submitted

Fortaco Group Holdco Oyj (the “Company“) issued on 22 July 2022 senior secured bonds with a principal amount of EUR 75 million and on 3 July 2023, the Company issued subsequent bonds in an amount of EUR 27.5 million under the same terms and conditions (together, the “Bonds“). The Bonds have been admitted to trading on the corporate bonds list of Nasdaq Helsinki Ltd under the trading code “FORJVAIH27”. The Company has again on 26 March 2024 issued subsequent bonds in an amount of EUR 25 million under the terms and conditions of the Bonds (the “Subsequent Bonds“). In accordance with the terms and conditions of the Bonds, the Company shall apply for the Subsequent Bonds to be listed on the corporate bonds list of Nasdaq Helsinki Ltd.

The Finnish Financial Supervisory Authority has today approved the listing prospectus of the Subsequent Bonds (the “Prospectus“). The Prospectus is available in English on the Company’s website at investors.fortacogroup.com. The summary of the Prospectus has been translated into Finnish.

The Company has today submitted an application for the Subsequent Bonds to be admitted to trading on the corporate bonds list of Nasdaq Helsinki Ltd. Trading on the Subsequent Bonds is expected to commence on or about 23 May 2024 under the same trading code “FORJVAIH27” as the Bonds.

Pareto Securities AB acted as the bookrunner in connection with the issue of the Subsequent Bonds.

For further information

Kimmo Raunio

Senior Executive Vice President & CFO

kimmo.raunio@fortacogroup.com

+358 40 593 6854

Distribution:

Nasdaq Helsinki

Principal media

www.fortacogroup.com

Categories: Stock exchange releases

by Fortaco

Fortaco Group calls for a written procedure

Fortaco Group Holdco Oyj (the “Issuer” and together with its subsidiaries from time to time, the “Group“) has instructed the agent for the Issuer’s senior secured bonds with ISIN NO0012547274 (the “Bonds“) to initiate a written procedure to request the bondholders to vote in favour of certain transfers of value, granting of loans, releasing certain transaction security, the disposal of certain assets being subject to transaction security under the Bonds and carrying out of certain mergers between members of the Group (the “Written Procedure“).

With reference to the Group’s press release on 28 February 2024, the Group is currently conducting a strategic review for the purpose of streamlining its business. Relating to such strategic evaluation, the Group and its owners are now looking to refine the business of the Group by divesting certain entities and certain assets owned by the Group, releasing certain transaction security under the Bonds and disposing of certain assets being subject to transaction security under the Bonds as well as carrying out certain mergers between members of the Group, all of which the Issuer deems will benefit the Group’s overall financial position in the long term and improve its profitability and thereby the credit quality of the Group.

For the purposes of carrying out the transactions following from the strategic evaluation referred to above and as part of the Written Procedure, the Issuer kindly requests that bondholders vote in favour of inter alia (i) carrying out a divestment of the shares in Fortaco Zrt with a transaction structure consisting of inter alia: (A) converting certain group internal loans granted to Fortaco Zrt to equity contributions, and (B) the Group acquiring certain equipment and giving Fortaco Zrt the right to use such equipment, without any compensation, while retaining full ownership until equipment is paid by Fortaco Zrt to the Group in full, (ii) releasing the transaction security over seven real estate properties located in Finland for the purposes of facilitating a disposal of such properties, (iii) an asset sale whereby Fortaco Oy (being an obligor and subject to transaction security) will dispose of all or a substantial part of its assets, and (iv) carrying out certain mergers between members of the Group, in each case on the principle terms and as further described in more detail in the notice of the Written Procedure.

The notice to the written procedure will be delivered to all bondholders through the CSD and is also available on the Issuer’s investor website (https://investors.fortacogroup.com/bond/). To be eligible to vote in the Written Procedure, a person must be registered as a Bondholder on 20 May 2024. The last day for voting in the Written Procedure is 27 May 2024.

For further information

Lars Hellberg

+358 40572 9488

lars.hellberg@fortacogroup.com

Categories: Stock exchange releases

by Fortaco