SOLOCAL_Registration Document_2017

6

FINANCIAL STATEMENTS 6.2 Annual financial statements for the financial years ended 31 December 2016 and 2017

Early redemption or buy-back: SoLocal Group may at any time and in several instalments repay all or part of the Bonds at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest; in addition, the bonds will be subject to mandatory early redemption (subject to certain exceptions) in whole or in part, in the event of certain events, such as a change of control, a disposal of assets (Assets Sale), or receipt of Net Debt Proceeds or Net Receivables Proceeds. Mandatory prepayments are also expected from funds derived from a percentage of excess cash flows, based on the level of the Company’s Consolidated Net Leverage Ratio. Financial commitments: the Consolidated Net Leverage/Consolidated Leverage/ l Consolidated EBITDA ratio should be less than 3.5:1; the interest coverage ratio (Consolidated EBITDA/Consolidated l Net Interest Expense) should be greater than 3.0:1; and from 2017 and (ii) for any subsequent year if the l Consolidated Net Leverage Ratio exceeds, at 31 December of the previous year, 1.5:1; capital expenditure (excluding growth transactions) (Capital l Expenditure) relating to SoLocal Group and subsidiaries is limited to 10% of consolidated revenue of SoLocal Group and its subsidiaries (Subsidiaries). The terms of the bonds also contain certain commitments not to do so, prohibiting SoLocal Group and its subsidiaries, subject to certain exceptions, in particular from: bearing additional financial debt; l granting sureties; l paying dividends or making distributions to shareholders; l paying dividends or making distributions to shareholders; as an l exception, the payment of dividends or distributions to shareholders is permitted if the Consolidated Net Leverage Ratio does not exceed 1.0:1. The restrictions contained in the terms of the bonds, described above, could affect the Group’s ability to carry out its activities and limit its ability to react to market conditions or to seize business opportunities that may arise. For example, these restrictions could affect the Group’s ability to finance the investments of its activities, restructure its organisation or finance its capital needs. In addition, the Group’s ability to comply with these covenants could be affected by events beyond its control, such as economic, financial and industrial conditions A breach by the Group of its commitments or restrictions may result in default under the above-mentioned agreements.

Breakdown of the debt As at 31 December 2017, the debt comprises the following: full repayment of the revolving credit facility for €38.4 million as l of 31 December 2017, initially drawn as of 31 December 2016; repayment of the A7 bank loan for €783.6 million against the l contractual repayment of the excess cash flow of the A7 tranche of the bank loan for €15.2 million as of 31 December 2016; issuance of non-convertible bonds for an amount of l €397.8 million; issuance of convertible bonds for an amount of €18.1 million, of l which 12.4 million were converted into shares during the year, i.e. a residual amount of €5.7 million as at 31 December 2017. Bond borrowings Following the completion of the financial restructuring, the l Group’s remaining gross debt was reduced to €397.8 million, redeveloped in the form of a non-convertible bond issue of €397,834,585, with the settlement-delivery taking place on 14 March 2017, reserved to the creditors under the Credits Contract, and whose principal conditions are as follows: Interest: interest calculation: margin plus EURIBOR rate (EURIBOR being l defined to include a minimum rate of 1%) three months, payable quarterly in arrears; late-payment interest: 1% increase of the applicable interest l rate. Margin: percentage per year based on the level of the consolidated net leverage ratio (consolidated net debt/consolidated EBITDA) at the end of the most recent six-month period (Accounting Period), such as indicated in the table below (it being specified that the initial margin will be calculated on a pro forma basis of the restructuring operations):

Net consolidated Leverage Ratio

Margin

Higher than 2.0:1

9% 7% 6% 5% 3%

Lower or equal to 2.0:1 but higher than 1.5:1 Lower or equal to 1.5:1 but higher than 1.0:1 Lower or equal to 1.0:1 but higher than 0.5:1

Lower or equal to 0.5:1

Maturity date: 15 March 2022. Listing: included on the official listing of the Luxembourg Stock Exchange and admission to trading on the Euro MTF market.

194 2017 Registration Document SOLOCAL