4Finance raus aus diesem Investment und bloss nicht neu investieren

DESCRIPTION OF THE ISSUER AND THE GROUP

4finance S.A. (also referred to as the “Issuer”) is a Luxembourg based company that issues notes in the capital markets and acts as the finance company for 4finance Holding S.A. and its subsidiaries (“4finance” or the “Group”).

4finance is one of the largest digital consumer lending groups in Europe with operations in 10 countries. Leveraging automation and data-driven insights across the business, 4finance has grown rapidly, issuing over EUR 10 billion since inception in instalment loans, lines of credit and single payment loans.

4finance operates a portfolio of market leading brands, through which, as a responsible lender, the firm offers simple, convenient and transparent products to millions of customers who are typically underserved by conventional providers.

4finance has group offices in Riga (Latvia), London and Luxembourg, and currently operates in 10 countries globally. 4finance also offers deposits, in addition to consumer and SME loans through its TBI Bank subsidiary, an EU licensed institution with operations primarily in Bulgaria, Romania and Greece.

EXPLANATION OF THE PROPOSED RESOLUTION

The Group is proposing to extend the maturity of the Notes to May 2028. In addition to extending the maturity, the Group proposes to:

The current maturity of the Notes is well over a year away in February 2025. However, the Group believes it is prudent to address the topic of bond refinancing well in advance and to do so in consultation and partnership with its investors. When reviewing its refinancing alternatives, the Issuer’s objectives have been to (i) secure a balanced maturity profile, spread approximately evenly in time and amount between at least two bonds, (ii) to ensure the Issuer maintains its good reputation in the bond markets, cultivated over the past ten years through issuing and refinancing several different bonds, and (iii) to conduct an efficient and timely process.

The Group believes an amendment process to be an appropriate and efficient tool to achieve these refinancing objectives. Since publication of its Q2 results the Group has consulted with leading investors representing a majority of its institutional and larger retail investor base. The management team has been encouraged by the broad level of support indicated, and would like to thank Holders for their engagement as well as their useful feedback, much of which has been incorporated into the proposals presented herein.

The Group is seeking the extension to the Notes because it believes the Notes have many positive characteristics for both 4finance and the Holders:

As such, for this particular bond, the Group believes that refinancing the Notes using this amendment mechanism is a more efficient than a ‘traditional’ refinancing via a new bond issue.

Further, as a consequence to the extension of the tenor of the Notes and the fact that Mr. Martin Schoebe, the partner currently performing agent duties at hww hermann wienberg wilhelm Rechtsanwälte Wirtschaftsprüfer Steuerberater Partnerschaft is leaving the partnership, hww hermann wienberg wilhelm Rechtsanwälte Wirtschaftsprüfer Steuerberater Partnerschaft requested the Issuer to be replaced as Agent and noteholder’s representative under the Terms and Conditions, in accordance with § 7 et seq. SchVG, by Greenmarck, with address at Widenmayerstraße 16, 80538 Munich, Germany, where Mr. Martin Schoebe is a managing director and continues to perform agent and security agent duties, in case of extension of the maturity beyond 23 February 2025.

The Group is seeking approval of the Holders to extend the tenor of the Notes until 23 May 2028 by amending § 2 para. 1 (Principal Amount, Currency and Denomination) of the Terms and Conditions and the respective amendment of the “Final Redemption Date” (as defined in § 1 para. 1 (Definitions) of the Terms and Conditions).

In addition, the Group is seeking approval of the Holders to amend the call structure of the Notes to gradually decline for the remaining tenor of the Notes, by amending the “Call Option Amount” (as defined in § 1 para. 1 (Definitions) of the Terms and Conditions).

For Holders who wish to exit the investment in the Notes closer to the current maturity of the Notes, the Group is seeking approval of the Holders to insert an additional repurchase (put option) for the benefit of the Holders capped at EUR 15,000,000.00, by amending para. 7 (Repurchase (put option) due to the amendment of these Terms and Conditions) to § 6 (Maturity, Redemption, Early Redemption, Repurchase) of the Terms and Conditions.

The purpose of the proposed resolution is, therefore, in particular, to extend the tenor of the Notes by three (3) years and three (3) months, to amend the call option amount of the Notes and to provide for an additional repurchase (put option) for the benefit of the Holders.

In addition to the fees described in section ‎7, if the proposed resolution is passed and becomes effective, the Group also commits to add its main operating entity in the Philippines (Online Loans Pilipinas Financing Inc.) to the list of guarantors for the Notes. Further, if the proposed resolution is passed and becomes effective, the Group commits to proceed to the cancellation of EUR 15,000,000 Notes held by the Group in accordance with § 6 para. 2 (The Group Companies’ purchase of Notes).

The Issuer kindly asks the Holders to support this extension and to vote in favour of the uniform resolution proposal of the Issuer set out in the following section ‎3.

UNIFORM RESOLUTION PROPOSAL AGENDA

The Issuer proposes to the Holders to adopt the following resolution, consisting of the resolution items in the following section ‎3.1 as a uniform resolution proposal (“Uniform Resolution Proposal”) pursuant to section ‎3.2 and puts this Uniform Resolution Proposal to the vote.

Amendment of the Terms and Conditions pursuant to § 15 para. 1 ( Amendments to the Terms and Conditions ) of the Terms and Conditions

(the “Amendments”).

All other provisions of the Terms and Conditions shall remain unaffected. The full set of the pro-forma amended Terms and Conditions will be provided on the website of the Issuer (https:/​/​www.4finance.com/​investors-and-media/​bonds/​) on or before the start of the Voting Period.

Uniform Resolution Proposal

The resolution items in section ‎3.1. constitute a Uniform Resolution Proposal. These resolution items will therefore only be voted on uniformly within the framework of the Uniform Resolution Proposal.

Effectiveness of the uniform resolution

The uniform resolution passed pursuant to this section ‎3 shall become effective if the following prerequisites have been met:

Issuer’s consent

The Issuer hereby grants its consent in advance, i.e. with announcement of this Invitation to Vote, to the Uniform Resolution Proposal. No resolution is to be passed on this agenda item.

Effectiveness of the Amendments

Following the effectiveness of the Uniform Resolution Proposal in accordance with section ‎3.3 above, the Amendments will become effective once the amended Terms and Conditions have been filed with the common safekeeper for Clearstream, Luxembourg and attached to the respective global note(s) representing the Notes.

A notice to this effect will be accordingly published on the website of the Issuer (https:/​/​www.4finance.com/​investors-and-media/​bonds/​).

LEGAL BASIS FOR THE VOTE WITHOUT MEETING, QUORUM AND MAJORITY REQUIREMENT

Legal basis

The SchVG, as amended from time to time, applies to the Notes. Pursuant to § 19 para. 1 (Governing Law) of the Terms and Conditions, the Notes, as to form and content, and all rights and obligations of the Holders and the Issuer shall be governed exclusively by, and construed in accordance with, German law.

Pursuant to § 15 para. 1 (Amendments to the Terms and Conditions) of the Terms and Conditions, Holders may, in accordance with the provisions of the SchVG, agree with the Issuer on amendments of the Terms and Conditions with regard to matters permitted by the SchVG by resolution with the majority specified in § 15 para. 2 (Majority/​Qualified Majority) of the Terms and Conditions. Majority resolutions shall be binding on all Holders. Resolutions which do not provide for identical conditions for all Holders are void, unless Holders who are disadvantaged have expressly consented to their being treated disadvantageously.

Pursuant to § 16 para. 3 (Vote without a Meeting) of the Terms and Conditions, all votes will be taken exclusively by vote taken without a meeting pursuant to Section 18 SchVG. A meeting of Holders and the assumption of the fees by the Issuer for such a meeting will only take place in the circumstances of Section 18 para. 4 sentence 2 SchVG.

Quorum

In a vote without meeting, the quorum in accordance with Section 18 para. 1 SchVG in conjunction with Section 15 para. 3 sentence 1 SchVG will only be satisfied if the Holders who duly participate in the vote (i.e., in particular according to the provisions of this Invitation to Vote) in terms of value represent at least half of the outstanding Notes.

Notes whose voting rights are suspended do not count as outstanding Notes.

If, at the end of the Voting Period, the Notary (as defined below) determines that there is no quorum, he may convene a noteholders’ meeting for the purpose of a new resolution pursuant to Section 18 para. 4 sentence 2 SchVG; the noteholders’ meeting is considered a second noteholders’ meeting within the meaning of Section 15 para. 3 sentence 3 SchVG. This second noteholders’ meeting has a quorum irrespective of the number of participating Holders. However, for resolutions whose effectiveness requires a qualified majority, those present must represent at least 25% of the outstanding Notes.

Majority requirements

Pursuant to § 15 para. 2 (Majority/​Qualified Majority) of the Terms and Conditions, resolutions shall be passed by a majority of not less than 75% of the votes cast. Resolutions relating to amendments of the Terms and Conditions which are not material and which do not relate to the matters listed in Section 5 para. 3 no. 1 to 9 SchVG require a simple majority of the votes cast pursuant to § 15 para. 1 (Majority/​Qualified Majority) of the Terms and Conditions.

According to section ‎2., the resolution items as set forth in section ‎3.1 represent a Uniform Resolution Proposal, whereby these resolution items are only voted on uniformly within the framework of the Uniform Resolution Proposal. The resolution items pursuant to sections ‎3.1(a)) are intended, in particular, to amend the maturity of the principal claim of the Notes pursuant to Section 5 para. 3 no. 2 SchVG. The Uniform Resolution Proposal therefore requires a qualified majority of 75% of the votes cast pursuant to Section 15 para. 2 (Majority/​Qualified Majority) of the Terms and Conditions.

LEGAL CONSEQUENCES UPON ADOPTION OF THE RESOLUTION

The legal consequences differ depending on whether the Uniform Resolution Proposal will be passed or not.

If the Holders validly pass the Uniform Resolution Proposal, this has, in particular, the following legal consequences:

If the Uniform Resolution Proposal is not passed (e.g., because the quorum is not met or the required majority is not reached), the Terms and Conditions remain valid in their present form.

PROCEDURE OF THE VOTE WITHOUT MEETING

Notary

Pursuant to Section 18 para. 2 SchVG, the scrutineer for the vote without meeting will be a German or foreign notary appointed by the Issuer or, if hww hermann wienberg wilhelm Rechtsanwälte Wirtschaftsprüfer Steuerberater Partnerschaft, Widenmayerstraße 16, 80538 Munich (the “Agent”) (appointed as Holders’ representative in accordance with § 9 para. 1(a) of the Terms and Conditions and Sections 7 and 8 SchVG) has convened the vote, by the Agent. The Issuer appointed the notary Mr. Kristof Schnitzler with registered office in Mendelssohnstraße 75-77, 60325 Frankfurt am Main, Germany (the “Notary”), as the scrutineer of the Vote without Meeting. The Notary will be assisted by the Agent, acting in its capacity as Holder’s representative, in conducting the Vote without Meeting.

Voting Period

Holders who wish to participate in the Vote without Meeting must cast their vote (“Vote Submission”) in text form (Section 126b BGB) within the time period commencing on Wednesday, 18 October 2023, 00:00 hrs (CEST), and ending on Wednesday, 25 October 2023, 24:00 hrs (CEST) (“Voting Period”). Vote Submissions that are received by the Notary prior to commencement or after termination of the Voting Period will not be considered.

Vote Submission

Vote Submissions may only be cast with the Notary directly or through the Clearing System (as defined below).

Evidence for the Vote Submission

Holders must prove their eligibility to participate in the Vote without Meeting no later than by the end of the Voting Period.

In case of Vote Submission to the Notary in accordance with section ‎6.3(a) above, proof is to be provided through both a special confirmation by the depository bank in text form (Section 126b BGB) in accordance with letter a) below (“Special Confirmation”) and by presenting a blocking notice issued by the depository bank in text form (Section 126b BGB) in accordance with letter b) below (“Blocking Notice”).

Holders that (i) have not submitted or sent the Special Confirmation and the Blocking Notice by the end of the Voting Period in text form (Section 126b BGB) and/​or (ii) have not had their Notes blocked in a timely manner or (iii) have not submitted or sent an Alternative Proof by the end of the Voting Period in text form (Section 126b BGB), are not entitled to vote. In such cases, authorized representatives of the Holders can likewise not exercise a voting right.

In case of Vote Submission to the Clearing System in accordance with section ‎6.3(b), each Holder must procure that such Notes subject to a Consent Instruction have been blocked in the securities account to which they are credited in the relevant Clearing System with effect as from, and including, the day on which the Consent Instruction is delivered through the Clearing System, so that no transfers of such Notes may be effected at any time after such date until the date that such Notes are unblocked pursuant to the terms set out in this Invitation to Vote. Such Notes should be blocked in accordance with the procedures of the relevant Clearing System and the deadlines required by the relevant Clearing System. The Notary shall be entitled to treat the submission of a Consent Instruction as Special Confirmation and Blocking Notice, i.e., a confirmation that such Notes have been so blocked. The Notary may require the relevant Clearing System to confirm in writing that such Notes have been blocked with effect as from the date of submission of the Consent Instruction. In the event that the relevant Clearing System fails to provide such confirmation, the Notary shall be entitled, but not obliged, to reject the Consent Instruction and if rejected, the Vote Submission in respect thereof shall be treated as not having been made.

Representatives of the Holders

Costs

The Issuer will bear the costs of the Vote without Meeting and pay all fees and expenses in connection with the Vote without Meeting, except for any fees and expenses incurred by any individual Holder in connection with the Vote without Meeting.

Contestation right of the Holders

In accordance with the SchVG, each Holder has the statutory right to contest any resolution adopted by the Holders within one month after publication of such resolution in the Federal Gazette (Bundesanzeiger). In order to be eligible to file a contestation claim with the competent court, Holders that participated in the Vote without Meeting have to object in writing with the Notary to the result of the Vote without Meeting within two weeks following the publication of the resolutions passed in the Federal Gazette (Bundesanzeiger). A contestation claim can be based on a breach of law or the Terms and Conditions.

FEES TO THE HOLDERS

Participation Fee

In the event that the Uniform Resolution Proposal is passed and the Terms and Conditions are amended accordingly, a Holder casting a valid Vote Submission in accordance with section ‎6.3 or providing the Agent with a valid proxy in accordance with section ‎6.5(c) above until the end of the Voting Period, together with Special Confirmation, Blocking Notice and proof of representation, shall receive by the Issuer a one-time cash payment equal to 1.25% per cent. of the nominal amount of the Notes held by the respective Holders (the “Participation Fee”), subject to section ‎7.2 below.

Payment of the Participation Fee

Payment of the Participation Fee shall be made within two weeks after the Amendments become effective in accordance with section ‎3.5 above. No Participation Fee will be paid if (i) the Vote without Meeting is terminated, withdrawn or otherwise not consummated, or (ii) the Uniform Resolution Proposal is not passed, or (iii) the Terms and Conditions are not otherwise amended in accordance with the Amendments.

In case of Vote Submission to the Notary in accordance with section ‎6.3(a), such Holder shall provide the Notary with the bank account details for payment of the Participation Fee and the Notary shall transmit such details to the Issuer. Failure to provide the Notary with the bank account details will result, at the discretion of the Issuer, in the forfeiture of the Participation Fee.

In case of Vote Submission to the Clearing System in accordance with section ‎6.3(b), payment of the Participation Fee will be made through the Clearing System.

ELIGIBILITY TO PARTICIPATE, VOTING RIGHT AND COUNTING OF VOTES

Eligibility to participate

All Holders are entitled to participate in the Vote without Meeting and to exercise their voting rights.

The Holders must prove their ownership of one or more Notes by the end of the Voting Period at the latest in accordance with section ‎6.4. If this proof is not provided or not provided in time, the respective Holder is not entitled to participate or vote. Representatives of the Holder may also not exercise the voting right in such cases.

Voting right

Pursuant to Section 6 para. 1 SchVG, first sentence, each Holder shall participate in votes in accordance with the principal amount or arithmetical share of the outstanding Notes held by such Holder. Therefore, each Note with a nominal value of EUR 1,000.00 entitles its Holder to one vote in the Vote without Meeting. Furthermore, pursuant to Section 6 para. 1 SchVG, second sentence, the voting rights attached to Notes are suspended in case (and as long as) the Issuer or one of its affiliated companies (Section 271 para. 2 of the German Commercial Code (Handelsgesetzbuch – “HGB”)) are entitled to such Notes or such Notes are considered for the account of the Issuer or one of its affiliated companies.

Counting the votes

The voting result is determined by the Notary on the basis of the addition method (Additionsverfahren), i.e. only the YES votes and the NO votes submitted will be counted. All votes submitted properly within the Voting Period and accompanied with the required verifications will be taken into account.

Reference is made to section ‎4.2 with regard to the quorum requirements.

ADDITIONS TO THE RESOLUTION ITEMS AND COUNTER MOTIONS

Additions to the resolution items

Holders who hold at least 5% of the outstanding Notes in total may request the Issuer that new resolution items are presented to be resolved on (Ergänzungsverlangen – “Request for Additional Resolution Items”).

The new items must be announced by no later than on the third day before the start of the Voting Period in the German Federal Gazette (Bundesanzeiger). It should be noted that the documents to be published in the German Federal Gazette (Bundesanzeiger) must be conveyed at least two (depending on the size of the document also more) publication days (i.e., days on which the German Federal Gazette (Bundesanzeiger) places publications) before publication with the German Federal Gazette (Bundesanzeiger). For this reason, the Holders are asked to convey any new resolution items to the Issuer by 10 October 2023 at the latest.

Countermotions

Each Holder is entitled to make countermotions (Gegenanträge) in respect of the subjects of the Uniform Resolution Proposal (“Countermotion”). Countermotions should be made in a manner timely enough to allow them to be published on the Issuer’s website (https:/​/​www.4finance.com/​investors-and-media/​bonds/​) before the Voting Period begins.

Addressee of Additional Resolution Items and/​or Countermotions

Countermotions and/​or Requests for Additional Resolution Items are to be sent to the Notary or the Issuer. The Holders are kindly requested to convey any Countermotions or Request for Additional Resolution Items by post, fax, e-mail or otherwise in text form (Section 126b BGB) in English language to the following address:

Proof of ownership for Requests for Additional Resolution Items and Countermotions

When conveying a Countermotion and/​or submitting a Request for Additional Resolution Items, a proof of the Holder’s eligibility is to be appended by presenting a Special Confirmation or an Alternative Proof (see above section ‎6.4); a Blocking Notice is, however, not required. In case of a Request for Additional Resolution Items, the Special Confirmation(s) or Alternative Proofs presented shall additionally set out that the Holder(s) who request to submit another resolution item represent (together) at least 5% of the outstanding Notes. Requests for Additional Resolution Items will also be published in the German Federal Gazette (Bundesanzeiger).

Making accessible Requests for Additional Resolution Items and Countermotions

Any properly filed and timely received Countermotions and/​or Requests for Additional Resolution Items will be made accessible to the Holders on the website of the Issuer (https:/​/​www.4finance.com/​investors-and-media/​bonds/​) without undue delay.

TERMINATION OR MODIFICATION OF THE VOTE WITHOUT MEETING

Notwithstanding anything to the contrary set forth in this Invitation to Vote, the Issuer reserves the right, in its sole discretion, subject to applicable law and certain contractual restrictions, at any time prior to the beginning of the Voting Period, to: (i) terminate the Vote without Meeting for any reason, and/​or (ii) modify the form or increase the amount of the consideration to be paid pursuant to the Vote without Meeting. The Issuer will promptly disclose such termination or modification in a public announcement.

Without limiting the manner in which the Issuer may choose to make a public announcement of any termination of the Vote without Meeting, the Issuer shall have no obligation to publish, advertise, or otherwise communicate any such public announcement, other than by making a timely announcement to the Holders and complying with any applicable notice provisions of the Terms and Conditions and the SchVG.

INFORMATION ON THE OUTSTANDING NOTES

The current volume of outstanding Notes is EUR 150,000,000.00 and is divided into 150,000 Notes, each having a nominal value of EUR 1,000.00.

The Issuer or its affiliated companies (Section 271 para. 2 HGB) are as of the date hereof holding 17,939 Notes for an aggregate nominal value of EUR 17,939,000.00 in nominal value of the Notes. In light of its ongoing programme to manage its liabilities, the Group reserves the right to continue to purchase or resell further Notes in accordance with the Terms and Conditions.

DOCUMENTS

Essential documents in connection with the Vote without Meeting will be made available to the Holders on the Issuer’s website (https:/​/​www.4finance.com/​investors-and-media/​bonds/​). From the day of publication of this Invitation to Vote until the end of the Voting Period, the following documents, among others, are available to the Holders on the Issuer’s website:

Queries in relation to abovementioned documents and the procedure may be submitted via telephone or e-mail to:

MISCELLANEOUS

The Vote without Meeting, this Invitation to Vote, the Vote Submission Form, the Proxy Form, the form for the Special Confirmation and Blocking Notice, Consent Instruction, voting proxies, and votes cast as well as any non-contractual obligations or matters arising from or in connection with the above provisions and the Vote without Meeting shall be governed by and construed in accordance with German law.

All documents that are to be submitted in conjunction with the Vote without Meeting must be either in German or in English language.