Amsterdam, 29 October 2009 - Heineken N.V. today announced that it has entered into contractual arrangements with EBP Pub Company Limited (EBP), a company controlled by FEOH Investments Limited (FEOH), which has acquired the tenanted pub Estate (the Estate) from Globe Tenanted Pub Company (GTP) in the United Kingdom.
The key terms of the contractual arrangements with EBP include:
The provision by Heineken to EBP of financing totalling £180 million for the acquisition of the Estate
A conditional share purchase agreement with FEOH (which is advised by R20, the investment vehicle of Robert Tchenguiz) under the terms of which it is anticipated that Heineken will acquire full ownership of EBP in the third quarter of 2010
The supply by Heineken of beer and corporate and management services to the Estate through S&N Pub Enterprises
The proceeds of the sale to EBP will be used principally to repay the senior Class A1 Notes, which partially funded GTP. Heineken owns 92.8% of the Class A1 Notes representing a face value of £175 million. It also owns 31.6% of the Class B1 Notes representing a face value of £18 million.
As a result of repayment of the Notes owned by Heineken, it is expected that the transaction will be broadly cash flow neutral in 2009 for Heineken.
Heineken continues to own a 23.9% participation in the syndicated bank debt of Globe Pub Management Limited (being £55 million out of an aggregate of £230 million). Heineken has also assumed the economic interest of the counterparty of Globe Pub Management Limited in a swap transaction.
The sale of the Estate to EBP follows GTP being in breach of its financial covenants. GTP and Bank of New York Mellon (BONYM), trustee to the holders of notes issued by Globe Pub Issuer plc, appointed Deloitte in June 2009 to conduct an independent review of the options available to the Estate, following which BONYM appointed partners from Zolfo Cooper LLP as Administrative Receivers of GTP on Thursday 29 October 2009. The Estate was subsequently sold to EBP for a consideration of £180 million. The Estate comprises of more than 400 pubs across the United Kingdom and for the 52 weeks to 31 August 2009, the Estate generated EBITDA of £19.1 million.