To the holders of the Secured Floating Rate Bonds with ISIN: EUR BONDS: SE0019175266 and SEK BONDS: SE0019175068 (the “Bonds”) issued by Recap Green Bond I AB (publ), Swedish reg. no. 559380-7430 (the “Issuer”), under the terms and conditions dated 21 December 2022.
The Issuer, as well as its wholly owned subsidiary Recap Solar Fund I AB, Swedish reg. no. 559112-0471, have on 21 March 2025, filed for bankruptcy.
Jimmy Pilo at Ackordscentralen has been appointed as bankruptcy trustee.
The non-Swedish entities Recap Iberica Finance S.L.U, Recap Canarias S.L. and Recap Portugal are initially not affected by the bankruptcy proceedings.
Background and rationale
As previously communicated, the portfolio, currently consisting of 8,7 MW of C&I rooftop solar installations, has struggled with profitability and cash flows caused by a combination of adverse factors including a sharp decline in Spanish electricity prices, construction delays, plants lost to accidents and plants operating at consumption levels significantly below initial projections. This has caused a severely strained financial situation for the entire structure, both in terms of equity levels and in near constant cash flow shortages, necessitating recurring capital injections from the group parent company throughout the bond term. At the end of 2024, the above-mentioned situation was addressed by the conversion of bond loans into preferential shares, to restore equity levels, and by a division of interest cost into a minor portion payable in cash continuously and a part accrued to be paid out to the bond holders at maturity. However, following the commencement of the Recap groups annual audit, handled by PWC, it has been determined that the book values of the structure’s assets exceed the fair value of said assets by far. The valuation of the underlying assets is based on a non-binding offer received for the sale of the entire portfolio. This leaves the Issuer, with a negative equity level. Moreover, the Issuer has been in an 8-month liquidation balance sheet period (Swe.“Kontrollbalansperiod”) since the 30th of August 2024, meaning that equity levels need to be restored by the 30th of April. The Issuer has concluded that there is no realistic way of restoring equity levels. It has also been determined that the Issuer will not be able to finalize the sale of assets by the end of this period, and that the bankruptcy trustee will therefore have to complete the sale and pay out as much as possible to the bondholders in the Issuer.