ONEXIM GROUP reaches an agreement with RBC to buy a controlling stake in RBC Information Systems
ONEXIM Group and RBC Information Systems (“the Company” or “RBC”) announce that they have reached an agreement on the main principles of resolving RBC’s complex situation. In the next seven days, ONEXIM Group and the management of RBC will send a joint proposal to RBC’s shareholders and creditors on the debt restructuring and the stabilization of the Company’s financial standing.
According to the joint proposal, ONEXIM will buy 51% of the Company’s increased share capital as a result of an additional share issue for $80mln. The proceeds of the share offering will be used, first of all, to restructure the Company’s debt, to solve the current operational issues and to fund the Company’s active development in the future. ONEXIM’s representatives will gain the majority in RCB’s Board of Directors, while the operational management of the Company will remain in the hands of the current management team.
The preliminary joint proposal provides for a one-off cash repayment of a substantial portion of the total debt of the Company (approximately 20%), a partial write-off of debt, and restructuring of the remaining amount into a marketable debt instrument. Some of the creditors, which are subject to regulatory restrictions on the assets write-offs (pension funds, military mortgages etc.), in addition to the cash compensation, will be offered a separate instrument, enabling them to get a full pay-back on their investments in a certain period of time.
The equity investment transaction by ONEXIM Group will be closed subject to consent from a certain number of the creditors to the proposed restructuring plan, and will be contingent upon receiving all necessary corporate and regulatory approvals. Another essential condition is the elaboration of a detailed business plan for 2009-2010 and realization of certain corporate and legal actions for the business restructuring, improvement of transparency and controls.
“While developing our proposal, we have considered the current critical financial standing of the Company. During spring and summer of 2008 the uncertainty about the Company’s future as well as the global slump in the media industry have led to a significant decline in the Company’s revenues and a sharp growth in non-payments by RBC’s clients. As a result, RBC falls short around $3mln monthly, which forces the Company to sell its assets. Furthermore, autumn is traditionally a time to negotiate media budgets for the next year. If unsuccessful, the chances of the Company surviving would be significantly impaired. Based on our estimates, there is only one to two months left to successfully complete negotiations between the Company, shareholders and creditors in order to avoid the bankruptcy,” said General Director of ONEXIM Group Dmitry Razumov.“Together with ONEXIM Group we have managed to find an optimal structure for stabilizing the situation around the Company that would account for the interests of the creditors, shareholders and the Company itself. So far, we have been able to accumulate positive experience of negotiating the debt restructuring with the creditors. We believe that ONEXIM’s new proposal would allow us to achieve a successful agreement with all parties concerned quickly”, said General Director of RBC German Kaplun.