Victoria Plc, the UK carpet manufacturer, successfully reached a binding transaction support agreement with KED Victoria Holdings LLC, Wood River Capital LLC, and holders representing approximately two-thirds of its outstanding €166.6 million 3.75% senior secured notes due March 2028. This comprehensive refinancing transaction aims to significantly strengthen Victoria's financial position by reducing its senior secured debt and preferred shares liabilities by at least £300 million. This deal also eliminates the near-term equity dilution risk associated with KED Victoria's preferred shares.
The refinancing package will slash annual finance costs, including the preferred shares payment-in-kind dividend, by roughly £34 million. By issuing new second-priority bonds due in 2031, the company effectively extends its debt maturities, pushing back the 2028 deadline. Consenting noteholders will receive new ordinary shares and €125 million of new 2031 notes at an exchange rate of €750 new notes for each €1,000 participating 2028 notes. KED Victoria will receive approximately €20.5 million of the new 2031 notes plus a non-interest-bearing contingent value right with a balance sheet liability of about £34 million, redeemable if cumulative EBITDA exceeds £400 million or market capitalization surpasses £800 million.
Non-consenting 2028 noteholders face the risk of having their notes written down to zero without consideration if the transaction proceeds via consent solicitation. Those who acceded within 10 business days of the agreement date were eligible for a £3.0 million early bird fee. Victoria's shares saw a significant jump, gaining 23.6% to 71.7p following the announcement. The refinancing is expected to materially reduce financial risk, enhance near-term cash flow, and establish a more robust platform for Victoria to focus on operational execution and long-term shareholder value creation.
