Klakki

Skipti restructuring finalised

20.06 2013

Today, Klakki´s subsidiary Skipti hf announces the finalisation of its financial restructuring, which completes a process which commenced in January 2013 and entails a conversion of unsecured debt to equity and the refinancing of senior debt.

Background:

Skipti hf (Skipti) is a subsidiary of Klakki ehf. Skipti in turn is the parent company of Síminn (Iceland Telecom), Míla, and other operating entities. In recent years, the Skipti group has been struggling with high debt levels and a challenging market environment as a consequence of the 2008 economic crash in Iceland.

Skipti´s management, with support from its owner Klakki, has over the past few years successfully implemented an operational turnaround of the business. Measures to improve profitability have delivered an EBITDA improvement (adjusted for nonrecurring items) from ISK 5.4bn in 2010 to an estimated ISK 9.0bn in 2013, bringing core EBITDA margins up to levels comparable with other Nordic telecoms businesses. Moreover, in early 2013 Skipti concluded a settlement with the Icelandic competition authorities which considerably reduced operational uncertainty.

The above achievements enabled Skipti to approach its creditors with the aim of restructuring the company´s debt to a sustainable level. In April 2013, Skipti obtained unanimous creditor consent for the terms of a financial restructuring and refinancing of the company and its subsidiaries. The main terms of the restructuring are a transfer of current equity to unsecured creditors in return for conversion of debt, together with a refinancing of current senior facility agreements. 

The closing day of the restructuring is today, June 20. In accordance with the terms of the restructuring, Klakki has today transferred all its shares in Skipti to the unsecured creditors and will henceforth cease to have an equity interest in the company. Klakki´s CEO, Magnús Scheving Thorsteinsson:  “Klakki welcomes the news of conclusion of the financial restructuring and commends the management of Skipti for its efforts in bringing the restructuring project to its fruition.”

For further information please contact:

Magnús Scheving Thorsteinsson - tel: +354 774-7678 - mst@klakki.is

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