Arc reorganises financial structure

The Arc group has announced financial restructuring.
    The Arc group has announced a major agreement with its shareholders and partners, as part of a financing process made necessary by the health crisis.

In a statement released yesterday, the group said the agreement has several components.

• First, the key shareholder since 2015 will bring €20M in the form of a capital injection, demonstrating again his confidence in the Group’s future. 

• Second, Arc will receive €108 million in new loans from the French State, the Région Hauts de France and the local community CAPSO, as part of the measures taken by the French public authorities to help businesses affected by the health crisis.  

• Finally, the key stakeholders reached an agreement on the current financing’s settlements and regarding the Arc’s Russian production subsidiary, OSZ, which will continue to operate under the distribution partnership and long-term licensing agreement with Arc Group.

Through a mutually beneficial partnership, the Russian plant, OSZ, will continue to produce for its local market, including Luminarc® branded products under a licensing agreement. For its part, Arc group will continue to export its products from France, the Emirates and China to the Russian market, via its distribution subsidiary ADR.

The beneficial consequences of these agreements are major for the Arc group and all its employees. The long-term sustainability of the business is now significantly enhanced. The important reduction in the debt burden and interest rates will significantly improve profitability, allowing Arc to continue the transformations ongoing since 2019. These include improvement of safety and working conditions, renovation of the furnaces, automation of the packing area, continuation of innovation and acceleration of the savings plan.

These agreements come in a very special context. The group’s performance indicators were in line with the targets set for 2019 and 2020 before the Covid-19 crisis and the effects of containment, which have been particularly intense in the Food Service sector. The business support system put in place by the French government, in the weeks following the outbreak of the health crisis, enabled the group to withstand the immediate down-turn and provided the company the necessary time to negotiate the refinancing agreements finalized today.

Nick Hodler, group chief executive officer, says: “This is great news for the company and all its employees. Thanks to the trust, commitment and support of our shareholders and partners, the Group will be able to continue its trajectory of transformation, modernization, improvement of working conditions and optimization of services for its customers. In particular, the agreements finalized today would not have been possible without the effective business support measures put in place by the French public authorities in response to the health crisis. We managed to find a structural solution to a short-term problem.”

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