MND (EPA:MND) MND resolves its financial difficulties by bolstering equity and restructuring debt with a view to boosting growth - MND share listing resumed

Directive transparence : information réglementée

14/08/2019 11:00

Sainte Hélène du Lac (Savoie, France), 14 August 2019


MND resolves its financial difficulties by bolstering equity and restructuring debt with a view to boosting growth

MND share listing resumed


New financial partner alongside the reference shareholder

Bank debt restructuring:

  • €34.8 million bank debt reorganised into a senior in fine loan repayable at maturity in 2023
  • New €15 million bridge loan

Planned capital increases:

  • Two capital increases totalling €35 million with cancellation of the preferential subscription rights
  • Free issue of stock warrants to shareholders under the same price conditions as the two capital increases


As stated in the 31 July 2019 press release, over the last few months Montagne et Neige Développement (“MND” or the “Company”(Euronext Growth - FR0011584549 - ALMND) and its advisers have been working to restructure and extend MND Group debt and to increase its equity so that its financial resources meet its needs, thereby resolving the financial difficulties announced on 31 July 2019[1].

The Company hereby announces the key features of its planned financial restructuring, which involves (i) a new financial partner alongside the MND's reference shareholder, (ii) restructuring of the Company's bank debt and (iii) two capital increases subject to shareholder approval voted in an extraordinary general meeting, with a view to bolstering the Company's equity.


New financial partner alongside the reference shareholder

MND has signed an agreement with Cheyne SVC LLP and Cheyne Capital Management (UK) LLP, an alternative investment fund manager regulated by the Financial Conduct Authority (“Cheyne SVC”), whereby Cheyne SVC undertakes to back the Company's planned bank debt restructuring and equity strengthening.

For this purpose, Cheydemont was formed as holding company, in which Montagne & Vallée (“M&V”), MND's reference shareholder[2], holds a 60% equity stake and Cheyne SVC holds the remaining 40%.

Cheyne SVC will grant loans repayable at maturity (December 2023) amounting to €19.5 million for M&V and €21.0 million for Cheydemont to fund their subscription of newly issued shares as laid out below. In return, the loans granted by Cheyne SVC will be secured in line with standard bank loan terms and conditions. Cheyne SVC will also be granted one M&V preference share and one Cheydemont preference share (see risk factors, page 7 of this press release).


Bank debt restructuring and new bridge loan

The Company has signed an agreement with its bank partners, under which a Cheyne SVC-managed fund will purchase €34.8 million of short and medium-term bank liabilities, thereby avoiding the risk of payment default in the event these partners accelerate their debts.

After the capital increases described above, bank liabilities bought by Cheyne SVC will be reorganised into a single senior loan granted to MND Group and repayable at maturity (31 December 2023) providing for customary financial covenants that will involve quarterly compliance with financial ratios that measure balance sheet gearing and cost of debt on the income statement (including available cash, adjusted net debt / adjusted EBITDA and adjusted EBITDA / interest repayment) [3]. This reorganisation of the MND Group indebtedness will materially reduce its short-term funding needs.

To fund the Company's current short-term operational needs, M&V will grant it a €15 million bridge loan itself drawn down from a credit facility granted by Cheyne SVC. This bridge loan will be repaid by offsetting against proceeds owed on the M&V capital increase described below.


Capital increases project totalling €35 million

In September 2019, the Company plans to implement two reserved capital increases with cancellation of the preferential shareholder subscription rights to designated persons, which together will amount to €35 million and will be subscribed by:

  • Cheydemont for an amount of €20 million by 18 September 2019; and
  • M&V for an amount of €15 million by 27 September 2019.

These capital increases will result in the issue of 48,780,488 and 36,585,366 new shares respectively at a €0.41 per share, based on an independent fairness opinion concluding this to be a fair issue price. This issue price represents a 46.41% discount vs. €0.765, the last quoted share price prior to listing suspension on 31 July 2019.


Planned free issue of stock warrants to shareholders

So that MND shareholders can participate in the planned capital increases, all shareholders shall be allotted one free stock warrant per share held following the second capital increase described above. These stock warrants will be exercisable from their issue date until 31 December 2020 by subscribing to one new share at €0.41, i.e. the same price as for the aforementioned share issues. These stock warrants will be negotiable and an application to listing on Euronext Paris's Euronext Growth market will be submitted. As far as possible the Company will shorten the period between the stock warrants' record date, allocation date and first listing date so as to minimise market risk.

M&V and Cheydemont hereby undertake to waive their rights to subscribe to the free stock warrants issue in respect of the shares they hold as at issue date.

Based on the shareholder breakdown as at the date of this press release and that of the planned transactions, exercise of all stock warrants to be issued would raise a further €5.45 million in capital. This transaction, which is valued at less than €8 million, will not give rise to a prospectus approved by the French financial markets authority (“AMF”).


Strengthening financial resources to support the growth plan

The above transactions will allow MND to have adequate financial means to fulfil its business plan by increasing its equity combined with lowering net debt and lengthening debt repayments.

The capital raised will enable the Company to meet its due operating liabilities, totalling €7.5 million at 30 June 2019, and to fund its working capital, which it would not be able to do without a major capital increase.

Management believe that, following the transactions, Company liquidity risk will be negligible and that it will be able to meet its future liabilities beyond the next 12 months.

The table below shows the impact on debt and equity of the planned transactions, on the basis of 31 December 2018 balances (unaudited data).


Unaudited data (€m) 31/12/18 After Cheydemont and M&V capital increases After exercise of all stock warrants
Shareholders' equity 27.4 62.4 67.9
Net debt 68.5 33.5 28.0
Gearing ratio 2.5 0.5 0.4


Shareholding changes

The tables below shows the planned changes in the capital breakdown of MND.

MND capital and voting rights breakdown at 31 July 2019
Shareholders Number of shares Equity % Number of voting rights Voting rights %
Montagne et Vallée: 4,998,904 25.82% 9,997,808 40.88%
AUDACIA 999,364 5.16% 999,368 4.09%
Subtotal M&V 5,998,268 30.98% 10,997,176 44.97%
EQUITY 5 85,500 0.44% 165,500 0.68%
PUBLIC 13,219,401 68.27% 13,233,031 54.09%
TREASURY SHARES* 60,345 0.31% 65,317 0.26%
TOTAL 19,363,514 100.00% 24,461,024 100.00%

*Treasury shares have no voting rights at general meetings but they are included in the calculation of theoretical voting rights.


MND capital and voting rights breakdown after Cheydemont and M&V capital increases by 18 September 2019
Shareholders Number of shares Equity % Number of voting rights Voting rights %
Montagne et Vallée: 4,998,904 7.34% 9,997,808 13.65%
AUDACIA 999,364 1.47% 999,368 1.36%
Cheydemont 48,780,488 71.58% 48,780,488 66.61%
Subtotal M&V 54,778,756
80.39% 59,777,664 81.62%
EQUITY 5 85,500 0.13% 165,500 0.23%
PUBLIC 13,214,429 19.39% 13,228,059 18.06%
TREASURY SHARES* 65,317 0.10% 65,317 0.09%
TOTAL 68,144,002 100.00% 73,236,540 100.00%


MND capital and voting rights breakdown after Cheydemont and M&V capital increases by 27 September 2019
Shareholders Number of shares Equity % Number of voting rights Voting rights %
Montagne et Vallée: 41,584,270 39.71% 46,583,174 42.42%
AUDACIA 999,364 0.95% 999,368 0.91%
Cheydemont 48,780,488 46.58% 48,780,488 44.42%
Subtotal M&V 91,364,122 87.24% 96,363,030 87.74%
EQUITY 5 85,500 0.08% 165,500 0.15%
PUBLIC 13,214,429 12.62% 13,228,059 12.05%
TREASURY SHARES* 65,317 0.06% 65,317 0.06%
TOTAL 104,729,368 100.00% 109,821,906 100.00%


After the second capital increase, it is planned that M&V will exercise its pledge to buy the 999,360 preference shares managed by Audacia on behalf of their holders. The agreed buyback price is €0.45 per 2012 preference share, which is slightly above the expected capital increase price due to the priority preference share dividends attached to the 2012 preference shares. Initially, the buyback price was set at around €3 per 2012 preference share.

M&V has pledged to convert these preference shares into ordinary shares by MND's annual general meeting that is expected to be held before the end of December.


MND capital and voting rights breakdown after buyback of the Audacia-managed preference shares and after exercise of all stock warrants by shareholders who have not waived their rights to subscribe by 31 December 2020.
Shareholders Number of shares Equity % Number of voting rights Voting rights %
Montagne et Vallée: 42,583,634 36.08% 47,582,538 38.65%
Cheydemont 48,780,488 41.33% 48,780,488 39.62%
Subtotal M&V 91,364,122 77.41% 96,363,026 78.27%
EQUITY 5 171,000 0.14% 251,000 0.20%
PUBLIC 26,428,858 22.39% 26,442,488 21.48%
TREASURY SHARES* 65,317 0.06% 65,317 0.05%
TOTAL 118,029,297 100.00% 123,121,831 100.00%


Impact of the transactions on consolidated equity and shareholders' equity stake

For information purposes, the impact of the aforementioned transactions on equity per share (calculated based on Group equity as at 31 December 2018 of €27.4 million (unaudited data) and on the total number of currently existing Company shares (19,363,514)), would be as follows:

  Group equity per share
  Undiluted basis Diluted basis*
Pre-issue  €1.42  €1.24
After Cheydemont and M&V capital increases  €0.60  €0.61
After exercise of all stock warrants  €0.57  €0.57

*If the 7,766,127 remaining convertible bonds have been converted as at the date of publication.


For information purposes, the issue's impact on the equity stake of a shareholder holding a 1% Company equity stake prior to the aforementioned capital increases, who does not subscribe thereto, (calculated based on the current 19,363,514 Company shares), would be as follows:

  Shareholder equity stake
  Undiluted basis Diluted basis*
Pre-issue 1% 0.71%
After to Cheydemont and M&V capital increases 0.18% 0.16%
After exercise of all stock warrants 0.16% 0.15%

*If the 7,766,127 remaining convertible bonds have been converted as at the date of publication.


Independent expert fairness opinion

On 1 July 2019 and in conjunction with the planned capital increases, the MND board of directors appointed an independent expert tasked with issuing a fairness opinion on the financial terms and conditions of the planned capital increases with cancellation of the preferential subscription rights to named persons, in accordance with Article 261-2 of the general rules of the AMF General Regulation.

The independent expert fairness opinion was issued on 22 July 2019 and its conclusion is as follows: “The results of our analysis of the MND share value based on the methods we applied and our valuation approach as at the date of our valuation, allow us to conclude that the planned issue price of €0.41 per MND share is fair.” »

The independent expert's fairness opinion is available on the Company website at www.mnd-bourse.com, under the heading Regulated Information.


Exemption from mandatory takeover bid

The above transactions will notably lead M&V to increase its initial stake of between 30% and 50% of MND's share capital and voting rights by more than 1% in less than 12 consecutive months, which generates the mandatory deposit of a public offer project.

In the circumstances, the AMF has granted an exemption from the mandatory deposit of such a public offer on the grounds of Article 234-9,2° of its General Regulation (recapitalization of a company in a situation of financial difficulty subject to at the approval of the general meeting of shareholders)


Calling shareholders to an extraordinary general meeting

Resolutions will be drafted for both capital increases for share issue with cancellation of the preferential subscription rights and will be proposed to a shareholder vote in an extraordinary general meeting. The shareholders will have been informed of the potential dilution in the Board of Directors' reports submitted to said general meeting. In order to issue shares at the adopted €0.41 per share price, a resolution will also be submitted to the general meeting approval authorising a share capital reduction of MND to lower nominal value per share and posting the difference with the existing nominal value to a non-distributable reserve account without changing the number of shares in issue.

Shareholders will also be called upon to vote on a resolution authorising issue of free stock warrants.

The following documents will be available for the public in advance of such general meeting:

  • The independent expert's fairness opinion on the fairness of the planned operations financial conditions;
  • The statutory auditors' special report on Company share capital transactions including share issues with cancellation of the preferential subscription rights;
  • The Board of Directors' reports to the various general meetings.


MND share listing resumption

The Company will apply to Euronext to resume the listing of MND shares that will be effective from 19 August 2019.


Update of the financial communication calendar

Given the strong mobilization of the Group's financial teams around the transactions presented above, the Group announces that the publications of the revenues and results for the 2018-2019 financial year, scheduled for August 30, 2019 and October 31 2019 respectively, will be shifted by one month, as indicated in the provisional schedule below.


Provisional schedule

14 August 2019 Press release issued
Independent expert fairness opinion made available
19 August 2019 MND share listing resumption
18 September 2019 MND extraordinary general meeting
Cheydemont capital increase
27 September 2019 MND extraordinary general meeting
M&V capital increase
30 September 2019 Publication of 2018-2019 revenues
4 October 2019 Free issue of stock warrants
Stock warrants first quoted on Euronext Growth
29 November 2019 Publication of 2018-2019 results
31 December 2020 Deadline for exercise of stock warrants


Risk factors

Investors are invited to consider the risk factors described under chapter 4 of the MND Registration Document registered with the French financial markets authority (AMF) on 28 March 2018 under number R.18-008. Such risk factors have not significantly changed since said date except for liquidity risk that is detailed in the 31 July 2019 press release and restated herein.

Investors' attention is drawn to the risk factors specific to the transactions covered herein including:

  1. Liquidity risk if the capital increases are not carried out. Should the capital increases not be carried out in the next few weeks, MND Group will not be able to meet its future liabilities, which would cast doubt on its ability to operate as a going concern.
  2. Dilution risks resulting from the capital increases. Shareholders who do not participate in the capital increases and who choose, additionally, not to exercise stock warrants that they would receive free of charge, will have their stake in the Company's capital and voting rights considerably reduced. Even if they choose to sell their stock warrants, any proceeds therefrom will be insufficient to compensate them for their equity dilution. A further consequence will be a sharp reduction in the public float that could mean lower daily trading volumes.
  3. The 2023 funding risk should debt markets be tight at that time, which would hinder the Senior loan refinancing.
  4. Risk of change of control due to M&V preference shares granted to Cheyne SVC and Cheydemont preference share granted to Cheyne SVC, which could be exercised should an event of default (primarily payment default, insolvency, breach of covenant or material adverse change (MAC) in the financial position of M&V, Cheydemont or MND) occur. Such a change of control would have no impact on the Company's existing borrowings and no material impact on MND's current sales contracts. A change of control would trigger a mandatory public takeover bid and Cheyne SVC would then have to comply with all applicable rules in such a situation.
  5. Risk of a market for the free stock warrants not existing. There is no guarantee that once the stock warrants are listed, a market will develop for them or that their holders will be able to sell them on a secondary market. There is no obligation to build a secondary market for the stock warrants. If a market does develop for the stock warrants, their price could be more volatile than that of MND shares.


[1] See 31 July 2019 press release

[2] As at 31 July 2019, Montagne et Vallée held 25.82% of the Company's equity and 40.88% of its theoretical voting rights.

[3] The above covenants will be disclosed in detail in the Company's financial report.



In the heart of the Alps, the MND group brings together a full range of complementary skills. A key player in a sector where France excels, the group is a benchmark industrial partner in the fields of mobility, safety and leisure. Harmonious and innovative development for ropeway transport infrastructure, safety procedures, snowmaking systems and extreme sports facilities require a global approach. This industrial vision provides a relevant and effective response for multiple customers, facilitating their projects and satisfying end users. It enables the MND group to operate in all the major international markets. With its five production plants, eight international distribution subsidiaries and 30 dealers worldwide, Subsidiaries of MND Group (LST, SUFAG, TECHFUN, TAS, MBS) are dealing with 3000 customers in 49 countries of the world. MND Group is a listed company on Euronext Growth in Paris (FR0011584549 – ALMND). More information : mnd-group.com


Your contacts:

MND Group – Roland Didier – Tel. +33 (0)4 79 65 08 90 – roland.didier@mnd-group.com

Press relations – Alexandre Bérard – Tel. +33 (0) 6 08 61 36 97 - alex@alternativemedia.fr

Financial press relations – Serena Boni – Tel. +33 (0)4 72 18 04 92 – sboni@actus.fr

Investor relations – Mathieu Omnes – Tel. +33 (0)1 53 67 36 92 – momnes@actus.fr

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