Continuation of the "Succeed Together 2024" strategic plan
Agreement on capital increase and financing of the MND Group
- Liquidity strengthening of €20.7 million
- Massive deleveraging: reduction of financial debt by €136.6 million through conversion into equity via a capital increase project reserved for Cheyne Capital and Cheydemont
- Extension of the maturity of the French State loan granted in 2020
through the Economic and Social Development Fund
Continuation of the strategic plan «Succeed Together 2024»
- Design and industrialisation of new product lines
- Extension of industrial buildings in Savoie to strengthen the Group’s production capacity
- Maintenance of the operational and financial objectives of the plan
“Succeed Together 2024”
Following discussions initiated during the summer of 2022, MND (Euronext Growth – FR00140050Q2 – ALMND) (the «Company«, and with its subsidiaries, the «Group«), a French industrial group specializing in cable mobility, snowmaking systems, mountain safety and sensational leisure infrastructure, announces that it has reached a financial restructuring agreement (the «Agreement«) with its main financial partners, Cheyne European Strategic Value Credit Fund («Cheyne«) and the French State through the Economic and Social Development Fund (FDES), providing for the provision of additional financing by Cheyne for a total of €20.7 million (including €14.0 million already paid), the strengthening of equity, the massive deleveraging of the Group through a capital conversion of existing debt to the tune of €136.6 million, and the extension of the maturity of the FDES loan granted in 2020 with amortization from July 2025 until July 2029.
This Agreement, which brings together Xavier Gallot-Lavallée and the main shareholders, Montagne & Vallée and Cheydemont, aims to strengthen the Group’s financial structure by restoring its balance sheet balance sheet and providing it with the necessary liquidity to enable it to carry out its growth and investments as part of the «Succeed Together 2024» strategic plan.
It meets the Company’s objectives of (i) ensuring its liquidity needs, (ii) providing a sustainable framework for the Group’s long-term development through the strengthening of the Company’s equity while allowing its current shareholders to participate in the transaction via warrants, (iii) pursuing its growth plan following a 2021/2022 financial year marked by an 81% increase in revenue, and (iv) make significant investments to design new product lines, and increase its industrial capacity in France to start production of these new solutions and urban transport projects in September 2023. In addition, this Agreement would allow the Company to recover a balanced financial structure following recent events affecting its business, including the Covid-19 crisis and the war in Ukraine.
Like many in the industry, the Company has faced a series of events in recent fiscal years. It has suffered the effect of the Covid-19 crisis, which has impacted the Group globally since January 2020, has led to the total or partial closure for an extended period of time of ski resorts in China, France and Europe in 2020 and 2021 and to a slowdown in investments in the sector with the partial closure of various production sites in France and Europe and the Group’s decision, in consultation with its customers, to interrupt its deliveries. Subsequently, the war in Ukraine in 2022 had an immediate impact on the Group’s activities in Central Asia, particularly in Russia, where the Group has been experiencing recurring activity for many years. Inflationary pressures that directly resulted from the Ukrainian conflict, and in particular the increase in raw material and transport costs, also weighed on the Group. These events led to pressure on the Group’s cash position and necessitated the strengthening of its balance sheet structure.
Bear in mind that the Company also obtained before the end of its 2021/2022 financial year a waiver from Cheyne relating to non-compliance with its financial covenants (ratios) as at 30 June 2022. It also obtained from Cheyne a similar waiver relating to the situations as at 30 September 2022 and 31 December 2022 as well as the provision of €14.0 million in additional financing in the form of simple bond issues subscribed by Cheyne during the first half of 2022/2023.
The implementation of the Agreement will require the approval of MND’s shareholders of the proposed capital increase (as described below) and remains subject to the fulfilment of certain conditions precedent customary for this type of transaction, including: (i) certain prior reorganisations; and (ii) the formalisation of the extension of the maturity of the loan granted by the FDES.
Xavier Gallot-Lavallée, Chairman and Chief Executive Officer of MND stated:
«Over the past two years, MND’s teams have successfully implemented the «Succeed Together 2024» strategic transformation plan, which has provided the Group with a new, efficient organisation and has enabled it to concentrate its industrial presence in France, Savoie.
Despite an unfavourable market environment, marked by the consequences of the conflict in Ukraine and the aftermath of the Covid-19 health crisis, we were able to return to sustained growth in the last financial year and improve our profitability.
By recovering, thanks to this agreement, a financial structure in line with our long-term ambitions, we are deploying the second part of our strategic plan: to make investments in the development and industrialisation of new product lines to pursue our growth plan in the service of our customers.
With these new investments in its historic industrial site in Savoie, MND proves once again its attachment to Made in France and its sustainable roots in the heart of the Auvergne-Rhône-Alpes region. This approach constitutes a strong commitment by the Group in its contribution to reducing the carbon footprint and ensuring environmental sobriety through shared stocks, limited transport flows and the choice of mainly regional partners and subcontractors.”
Franck Laval, Managing Director in Cheyne’s Strategic Value Credit team, commented:
«Cheyne fully adheres to the «Succeed Together 2024» strategic plan led by Xavier Gallot-Lavallée, his management team and his 300 employees. We are confident in its success. The Agreement presented today ensures the essential alignment of the Group’s financial capabilities with its objectives. It testifies to Cheyne’s complete commitment alongside MND, in this way becoming a shareholder alongside its founding director.
Through this transaction, Cheyne remains faithful to its values and objectives: to finance and support European SMEs and mid-caps positioned in buoyant markets.”