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Santiago, December 7, 2024, WOM S.A. (“WOM Chile” and, together with its debtor affiliates, the “Company”) is pleased to announce that today it has entered into a Plan Sponsor Agreement (the “PSA”) and Backstop Commitment Agreement (the “BCA”) with the Ad Hoc Group of Noteholders, the members of which collectively hold approximately 60% of the Company’s Unsecured Notes (the “AHG”), subject to approval of the U.S. Bankruptcy Court. The PSA and BCA, which set forth the terms of the Company’s contemplated plan of reorganization, include the following key provisions:
- US$1.6 billion plan enterprise value
- Up to US$500 million Rights Offering to be fully backstopped by the AHG. The Rights Offering consists of (a) US$95 million of New Secured Notes due 2030 and (b) up to US$405 million for up to 92% of the reorganized Company’s common equity on a fully-diluted basis, but prior to dilution from any Management Incentive Plan.
- Eligible holders of Unsecured Notes Claims, as well as eligible holders of General Unsecured Claims who elect such treatment, would receive their pro rata share of (a) US$225 million of New Secured Notes due 2030, (b) all of the reorganized Company’s common equity, prior to dilution from the Rights Offering and Management Incentive Plan and (c) rights to subscribe to the Rights Offering (collectively, the “Non-Cash Consideration”).
- Holders of General Unsecured Claims would receive their choice of (a) their pro rata share, together with eligible holders of Unsecured Notes Claims, of the Non-Cash Consideration (subject to satisfying legal eligibility criteria), or (b) their pro rata share of up to US$70 million of cash.
- Repayment of the Company’s US$210 million debtor-in-possession financing in full in cash.
- Net reduction of WOM Chile’s financial debt by approximately US$650 million on a fully-diluted basis.
- Extinguishment of the Company’s existing common equity for no consideration.
Additional details can be found in the motions to approve WOM Chile’s entry into the PSA and BCA that have been filed with the U.S. Bankruptcy Court for the District of Delaware, whose approval is necessary in order to consummate the contemplated restructuring transactions.
WOM Chile’s Chief Executive Officer, Martín Vaca Narvaja, said: “Today marks an important milestone in WOM’s restructuring. I am proud to announce that, eight months after filing for Chapter 11, we have reached an agreement with the AHG on the terms of a financial restructuring for the Company. The entry into the PSA and the BCA by the AHG and the Company reflects a strong show of support from WOM’s largest creditor constituency, providing the Company with a significant new money commitment. It also establishes a clear path to deleveraging our balance sheet, fully funding our business plan, including the remainder of our 5G buildout, and offering meaningful recoveries to all unsecured creditors. We have now initiated the process of seeking U.S. Bankruptcy Court approval for this transaction and expect to emerge from Chapter 11 in early 2025 as planned. We are very excited about the future of WOM and honored to have the support of the AHG”.
