PARIS (Reuters) – Orpea announced on Wednesday that its restructuring plan had been approved by a majority of the classes of affected parties and that it would be presented as planned to the Commercial Court of Nanterre in the coming days.

If the court approves the plan, Orpea will be able to finalize its financial restructuring during the second half of 2023, added the French manager of Ehpad.

The title, suspended Wednesday, will resume its quotation Thursday morning at the opening of the markets, specified Orpea in a press release.

This vote is an important step in the financial restructuring of the heavily indebted group, in turmoil for more than a year against a backdrop of accusations of failures in the care of residents and financial embezzlement.

It should allow the implementation of an agreement signed in February with a group of investors led by the Caisse des dépôts et consignations (CDC), which will take control of the group, making the French state its main shareholder. The transaction will result in significant dilution for shareholders.

“To the extent that the draft accelerated safeguard plan has not been approved by all classes of parties affected by the majority required, and in the event that the plan is stopped by the Court, the existing shareholders should hold, after completion of the capital increases and in the absence of reinvestment, approximately 0.04% of the Company’s capital. The theoretical value of the share would also amount to approximately 0.02 euro”, indicated Orpea.

Of the 10 classes of parties affected, 6 approved the draft accelerated safeguard plan by the majority required (more than 2/3), 3 others, including that of the shareholders, supported the draft accelerated safeguard plan by more than 50% and the OCEANE class voted 49.2% in favor of the plan (50.8% against), detailed Orpea.

In the absence of a majority required for all the classes concerned, Orpea will therefore ask the Commercial Court to order the accelerated safeguard plan by “forced application between classes”.

This mechanism is included in the reform of the law of companies in difficulty of September 2021 and provides that a restructuring plan which is not validated by all classes of affected parties can nevertheless be approved by the judicial administrators and imposed on one or more several dissenting classes.

(Written by Diana Mandiá and Jean-Stéphane Brosse)

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