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 Chanin Capital Partners acted as operational and financial advisor to Song Networks Holding AB, the largest CLEC in the Scandinavian market with a network integrated within Denmark, Finland, Norway, and Sweden, which successfully completed a restructuring through the Dutch Akkoord in the District Court of Amsterdam.
Acquisitions and rapid growth through its network build-out left Song with a funding gap that it was unable to satisfy through the capital markets. The Company's cost and capital structure were inconsistent with its financial projections and strategic business plan.
Chanin was retained in May 2002, received an investor commitment in July 2002, and the final deal terms were announced in early October 2002.
Highlights of the transaction include:
- Bondholders swap 100% of debt ($600 million) for 60% of equity in New Song
- Equity holders retain 3% of new equity
- Vattenfall AB and Stena AB invest new money for 19.5% of equity
- Vattenfall AB sells its subsidiary, Arrowhead SE, to Song for 6.5% of equity
- The Company conducts a successful rights offering for 6.5% of equity
- The Company plans a convertible note offering at 150% of recap price for 4.5% of. equity
- Precedent reorganization under the Dutch Akkoord
- Song emerges from bankruptcy debt free, with access to a working capital revolver
- Organizational restructuring implemented and Song becomes EBITDA positive
- Management projects vast synergies from Arrowhead merger
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