THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

17 February 2021

Atlas Mara Limited's Update on Standstill and Statement regarding TLG

Key Highlights

·      Atlas Mara and the consenting creditors under the recently announced Standstill continue constructive discussions to achieve a comprehensive debt restructuring.

·      Previously announced strategic initiatives remain on track, with accelerated activity to complete contemplated divestitures.

·      A small holdout creditor, TLG, has filed a Court application against the Company.

·      The Company sees TLG's actions as both hostile and detrimental to the interests of the Company and its creditors, including TLG itself.

·      A number of significant creditors have, since TLG's application, reaffirmed their support for the Company and intend to assist in contesting TLG's actions.

·      The Company's subsidiary banks remain unaffected by TLG's counter-productive actions and their operations continue in the ordinary course.

Further Details

Atlas Mara Limited ("Atlas Mara" or the "Company," and including its subsidiaries, the "Group"), the sub-Saharan African financial services group, hereby provides an update on progress made and developments in its discussions with bilateral lenders and certain principal holders of the Group's convertible bonds due 31 December 2020. 

As previously announced by the Company on 29 December 2020, the Company, and certain other members of the Group, had entered into a standstill agreement with certain creditors in respect of the Company's and ABC Holdings Limited ("ABCH")'s financing arrangements (the "Standstill"). Creditors representing over 87.7 percent of the aggregate amount outstanding under bilateral facilities of the Company and ABCH agreed to enter the Standstill or similar bilateral agreements. The Standstill was also entered into by over 60 percent of the principal holders of the Group's convertible bonds due 31 December 2020.

The objective of the Standstill is to provide sufficient time for engagement between the Company and its creditors to reach agreement on a sustainable long-term solution for the Company's and ABCH's debt and repayment profile. The consenting creditors under the Standstill have agreed not to exercise certain rights, or otherwise take actions, in respect of rights and repayments that may arise under the convertible bonds and bilateral facilities as a result of the Group not making principal and interest payments, until and including the earlier of 31 March 2021 (unless extended) and termination of the Standstill.

Since announcing the Standstill agreement in December 2020, the Company has continued to have a constructive dialogue with the trustee of the convertible bonds and additional bondholders above the initial 60 percent of principal holders and has been focussed on developing its restructuring proposal with reference to the interim milestones in the Standstill.  While agreement has yet to be reached, the Company and the consenting creditors under the Standstill continue to make progress in discussions on a proposed plan that will provide stability for the benefit of all stakeholders. The plan for comprehensive recapitalisation or restructuring of the Company's and ABCH's balance sheet involves further strategic transactions including divestitures in addition to the previously announced transactions.  The Company continues to make significant progress on the previously announced divestitures, and has further reviewed a range of other options with respect to its other assets to realign the balance sheet for value realization and help the Company weather the challenges wrought by the COVID-19 pandemic.  The Board of Atlas Mara is pursuing a comprehensive solution for the Company's balance sheet and acceleration of potential strategic transactions for the benefit of all relevant stakeholders.

While the Company continues discussions with certain holdout creditors, the Company announces that it has been informed by lawyers acting for one of its holdout creditors, TLG ATMA Ltd ("TLG") that TLG has filed an application with the High Court of Justice (Commercial Division) of the Eastern Caribbean Supreme Court, British Virgin Islands pursuant to section 159, section 162(a) and section 162(1)9b) of the Insolvency Act 2003 seeking to appoint joint liquidators in respect of the Company (the "Application").  The amount of outstanding debt related to TLG is approximately $10.8 million, which includes accrued interest and other costs that TLG is seeking, as compared to the overall amounts due to other consenting creditors who continue to be supportive. 

By way of background, TLG and two other creditors did not agree to enter into the Standstill or similar arrangement with the Company, notwithstanding the benefits of the Standstill to the Company's creditors as a whole.  Since executing the Standstill with a significant majority of its creditors, the Company has continued to attempt to engage with TLG in an effort to obtain its support and agreement to the terms of the Standstill or to find another consensual solution. TLG has not been receptive to these options and has instead taken a number of actions which the Company believes are damaging to TLG's position and the position of the Company's other creditors, including filing and subsequently withdrawing a Statutory Demand and culminating in the filing of the Application on 16 February 2021  without proper consultation with the Company. A number of significant consenting creditors have reaffirmed their support for the Company by granting certain waivers as a result of these hostile actions taken by TLG.

The Company is in discussions with TLG to have the application withdrawn. In the event that TLG is unwilling to withdraw the application, the Company intends to robustly contest it for the benefit of its creditors as a whole and other stakeholders. The Company continues to have support from a significant majority of creditors as a result of the Standstill and intends to continue working towards the successful implementation of a restructuring and divestiture programme in order to maximise value for its creditors and other stakeholders, recognizing that there is a risk of insufficient value for shareholders if the Company is unable to do so. 

These actions pertain only to the Company and do not impact the subsidiary banks, which operations continue in the ordinary course.  The Company will update the market with any further material developments on the TLG application, the restructuring process and ongoing divestitures.

Contact Details:

Investors

Kojo Dufu, +1 212 883 4330

Media

Apella Advisors, +44(0) 7818 036 579

Anthony Silverman 

About Atlas Mara

Atlas Mara Limited (LON: ATMA) is a financial institution listed on the London Stock Exchange. Atlas Mara aims to be a positive disruptive force in the markets in which we operate by leveraging technology to provide innovative and differentiated product offerings, deliver excellent customer service and accelerate financial inclusion. For more information, visit www.atlasmara.com.