2022-05-20 07:30:00 CEST

2022-05-20 07:30:12 CEST


Lehto Group Oyj - Inside information

Lehto Group Plc: Lehto and banks have agreed on financing as part of approximately EUR 50 million financing package

Lehto Group Plc
Insider information
20 May, 2022 at 8.30 a.m (EET)

Lehto Group Plc (”Lehto”) announced on 28 April 2022 that it is preparing a
financing package to implement its updated strategy. Lehto has signed a binding
preliminary agreement on new financing (”Preliminary Agreement”) with OP
Corporate Bank Plc (”OP”) and Nordea Bank Plc (“Nordea”). Preliminary Agreement
defines the amounts, main conditions and principles of bank financing, and main
terms of the convertible bond issuance.

Preliminary agreement is part of approximately EUR 50 million financing
arrangement under preparation. Main elements of the financing arrangement are:

  · Divestment of Lehto’s pipeline renovation business (approximately EUR +29
  · New RCF credit facility from the banks (approximately EUR +13 million)
  · RS financing for ongoing and new housing projects (approximately EUR +26
  · Issuance of the convertible bond (approximately EUR +15 million)
  · The new financing replaces the current RCF credit facility and bilateral
bank loans that will be repaid (approximately EUR -32 million)

According to the Preliminary Agreement OP and Nordea are committed to grant a
new EUR 13 million RCF credit limit that is valid until 31 March 2024.
Additionally, banks are committed to finance so called RS housing projects by
approximately EUR 26 million during years 2022-2023. The new financing agreement
that will be prepared according to Preliminary Agreement (“New Financing
Agreement”) will replace Lehto’s current EUR 25.1 million Revolving Credit
Facility (RCF) with a bank syndicate comprising OP Corporate Bank plc, Nordea
Bank plc and Swedbank AB.

The validity of the New Financing Agreement is subject to completion of pipeline
renovation business divestment, completion of the convertible bond issue as well
as repayment of current RCF credit facility and bilateral loans by 30 June 2022.
The New Financing Agreement will include securities, financial covenants related
to EBITDA and minimum cash requirements, restriction on distributions, and
conditions related to company’s operations and constitution and chairman of the
board of directors.

The financing package is estimated to improve Lehto’s cash flow approximately by
EUR 50 million, whereof majority is expected to occur in year 2022. Apart from
divestment of pipeline business financing package does not have an immediate
effect on profits. As announced earlier in the stock exchange release on 28
April 2022, divestment of the pipeline renovation business is estimated to have
following effects on Lehto’s key figures in year 2022:

  · Estimated non-recurring effects
    · The result for the financial year 2022 will improve by approximately EUR
30 million
    · Equity will improve by approximately EUR 30 million
    · Net cash flow in 2022 will improve by approximately EUR 29 million
    · The equity ratio will improve by about 6-7 percentage units

  · The estimated impact of the divestment on net sales and operating profit in
    · Net sales from continuing operations is decreased by approximately EUR -36
    · Operating result from continuing operations is decreased by approximately
EUR -5 million.

In addition to financial arrangement, as announced earlier, company has carried
out personnel reductions and company has outsourced and is still outsourcing
land plots in order to improve its profitability and cash flow.

Further information:
Juuso Hietanen


Puh. +358 50 343 4023
Veli-Pekka Paloranta
Puh. +358 400 944 074