EPH proposes a capital increase of 60 million kuna

In the process of pre-bankruptcy settlement, Europapress Holding (EPH) has submitted a revised plan for financial and operational restructuring and a new settlement proposal, which suggests a capital increase of 60 million kuna, the merger of all companies in its ownership, the reprogramming of obligations to suppliers and creditors, and ways to reduce indebtedness.

EPH submitted the revised plan for financial and operational restructuring and a new settlement proposal to the Settlement Council on September 20, aligned with the decision on established claims from September 11, as announced today on the website of the Financial Agency (FINA).

The total obligations of EPH, established at the hearing held on September 11, amount to 1.78 billion kuna, with obligations to financial institutions that have reported a secured claim of 416.25 million kuna. Of the total established claims, the amount of 1.7 billion kuna relates to guarantees from related companies for loans for which EPH is the user.

The largest claims are held by creditors from Europapress Holding itself. Thus, 4 Media claims 396.17 million kuna from EPH, EPH Media 383.3 million, EPH Magazines 361.2 million kuna, Gloria Group 238.77 million kuna, and Media Nexus, with a claim of nearly 204 million kuna. All these companies are also in the process of pre-bankruptcy settlement.

Among the secured creditors, who have enforcement documents and claim 416.25 million kuna from EPH, the largest claim is held by Hypo Leasing Kroatien, at 157.4 million, followed by Zagrebačka banka, 121 million, and Hypo Alpe Adria Bank International, nearly 83 million kuna.

The revised financial restructuring plan again proposes a capital increase through a cash payment of at least 60 million kuna, which secures 80 percent of ownership rights and shares. The conditions and procedure for the planned capital increase would be jointly determined by the owners and creditors.

The restructuring plan also foresees the merger of companies wholly owned by EPH, the cancellation of all guarantees for loans provided by related companies, except in the part of collateral security. Obligations to related companies in 100 percent ownership would disappear through the implementation of the merger (their write-off is planned at 100 percent).

Additionally, financial restructuring of obligations to credit institutions and the regulation of outstanding obligations to the state and suppliers is proposed.

Specifically, for all creditors, a write-off of interest is anticipated. The reprogramming of existing debt to the Ministry of Finance for taxes and contributions includes a write-off of 40 percent of the debt for taxes and contributions (excluding taxes and contributions from and on salaries), while the remainder would be settled within 4 years without interest, with a grace period of 12 months from the date of the settlement agreement.

In the same way, reprogramming of debt to other suppliers is proposed, while the reprogramming of obligations to RPO and author fees would be carried out in such a way that the debt is repaid within one year, without interest from the date of the settlement agreement. Settlement of obligations to employees is anticipated in full.

Furthermore, EPH proposes that the restructuring of obligations to financial institutions and creditors, amounting to 416.25 million kuna, be carried out in such a way that 10.88 million in interest and fees is written off, 118.6 million (Hypo Leasing loan) is collected from assets, 199.78 million kuna is resolved through a hybrid financial instrument – mezzanine, and 86.98 million kuna becomes senior debt, which would be repaid over 8 years, with a grace period of 18 months.

EPH also states that restructuring costs amount to up to 4 million kuna.

Based on the proposed settlement plan, EPH believes that all creditors would achieve a significantly higher percentage of recovery based on the proposal and implementation of the pre-bankruptcy settlement than in the case of the company’s bankruptcy.