NZ57 Infrcp Suk.perp

NOTICE TO HOLDERS OF THE HYBRID CERTIFICATES

Exchange Offer and Rationale

Infracorp B.S.C. (c) (Infracorp) invites holders of the outstanding U.S.$1,000,000,000 Exchangeable Hybrid Capital Certificates issued by Infracorp Sukuk Limited (ISIN: XS2443909192) (the Hybrid Certificates) to offer to exchange their Hybrid Certificates, up to an aggregate face amount of U.S.$500,000,000, for new U.S. dollar-denominated fixed rate senior sukuk (the New Senior Sukuk) to be issued by Infracorp Senior Sukuk Limited with Infracorp B.S.C. (c) as the obligor (the Exchange Offer). The key terms of the New Senior Sukuk are set out under the attached term sheet (the Term Sheet). The Exchange Offer and the New Senior Sukuk have been approved by the shareholders of Infracorp, however the final terms thereof remain subject to requisite approvals/notifications.

The Exchange Offer is being undertaken by Infracorp as part of a proactive approach to the strategic management of its capital and debt structure, and Infracorp believes that the intended benefits of the Exchange Offer (for existing holders of the Hybrid Certificates that are accepted for exchange) are as follows:

(1)    holders of the New Senior Sukuk will be senior (and not subordinated) creditors;

(2)    profit payments under the New Senior Sukuk (a) will be fixed at a rate of 6 per cent. per annum payable semi-annually, (b) will not be discretionary, and (c) may not be cancelled by Infracorp;

(3)    holders of the New Senior Sukuk will have the benefit of certain covenants from Infracorp;

(4)    the New Senior Sukuk will be treated as debt and have a fixed maturity date; and

(5)    the New Senior Sukuk will be convertible into shares in Infracorp at the option of the holders of the New Senior Sukuk, subject to certain conditions.

Consent solicitation and additional information with respect to the Hybrid Certificates

Infracorp will be undertaking a consent solicitation exercise (the CS) with respect to the Hybrid Certificates which is expected to be effective by 5 December 2024. Pursuant to the CS, Infracorp will request holders of the Hybrid Certificates to agree to certain amendments to the terms of the Hybrid Certificates with such amendments being those described in sub-paragraphs (1) and (2) below save that, in relation to sub-paragraph (2) below, the italicised text is included by way of disclosure only and does not, and will not, form part of the contractual terms and conditions of the Hybrid Certificates. All other aspects of the terms and conditions of the Hybrid Certificates as set out in the declaration of trust dated 15 March 2022 as supplemented by the supplemental declaration of trust dated 28 March 2024 in each case made between Infracorp Sukuk Limited, Infracorp and Citibank N.A., London Branch will remain unchanged:

(1)    the First Call Date to be amended from 15 March 2027 to 15 September 2029; and

(2)    the expected Profit Rate to be amended:

from

(a) 7.5 per cent. per annum (up to the First Call Date) (with 4 per cent. per annum in cash and 3.5 per cent. per annum in the form of PIK (as defined in the Term Sheet)); and

(b) 8.5 per cent per annum (from the First Call Date) (with 4 per cent. per annum in cash and 4.5 per cent. per annum in the form of PIK),

to

(c) 7.5 per cent. per annum (before and after the First Call Date) (with (1) inter alia the Planned Cash Profit Rate (as defined in the Term Sheet) in cash and the remainder in the form of PIK (up to the First Call Date); and (2) 7.5 per cent. per annum in cash (from the First Call Date)).

The Schedule to the Term Sheet also sets out amounts and dates on which Infracorp presently intends to make payments based on its business plan and expected capacity to pay (noting that such information does not, and will not, form part of the contractual terms and conditions of the Hybrid Certificates) (the Additional Information). The Additional Information includes the following with respect to the Hybrid Certificates (please see the Term Sheet for further details):

A.     the present intention of Infracorp to postpone all payments of periodic distribution amounts with respect to the Hybrid Certificates until 15 September 2026, provided that profit amounts are presently intended to be calculated from (and including) 15 September 2024 (being the most recent periodic distribution date) at the rates set out in the Term Sheet; and

B.     the respective portions of the profit rate (used to calculate the periodic distribution amounts) that Infracorp presently intends to:

(i)      pay, i.e. to be revised from 4 per cent. per annum to (A) (up to the First Call Date) inter alia the Planned Cash Profit Rate which is to be calculated by reference to 50 per cent of the consolidated net profit of Infracorp for the most recent financial year ended immediately prior to the relevant periodic distribution date, expressed in U.S. dollars (capped at 7.5 per cent. per annum); and (B) (from the First Call Date) 7.5 per cent. per annum;

(ii)   defer, i.e. to be revised (A) (up to the First Call Date) from 3.5 per cent. per annum to 7.5 per cent. per annum minus the Planned Cash Profit Rate (subject to a floor of zero); and (B) (from the First Call Date) from 4.5 per cent. per annum to zero; and 

(iii)    cancel, i.e. being the previously deferred amounts of PIK of 3.5 per cent.  per annum for the period from the Issue Date of the Hybrid Certificates (being 15 March 2022) to the effective date of the CS (expected to be 5 December 2024).

Final Acceptance Amount and exchange consideration

Infracorp currently intends to accept for exchange a total face amount of U.S.$500,000,000 of the Hybrid Certificates (the final amount accepted for exchange pursuant to the Exchange Offer being the Final Acceptance Amount). If the total face amount of the Hybrid Certificates offered for exchange is more than U.S.$500,000,000, Infracorp intends to accept such offers of Hybrid Certificates on a pro rata basis (as determined by Infracorp) such that the total face amount of Hybrid Certificates accepted for exchange (the Exchanged Certificates) is U.S.$500,000,000.

The total face amount of New Senior Sukuk that each participating holder will receive, on the expected settlement date being 12 December 2024 or such other date as notified by Infracorp in its sole discretion (the Exchange Settlement Date), will be equal to the total face amount of the Exchanged Certificates (being the Accepted Amount (as defined below)) of such holder.

Participation in the Exchange Offer and timetable

For holders to be eligible to receive New Senior Sukuk, they (or their custodian, if applicable) must send an email (substantially in the form set out below) that is received by Infracorp (an Instruction Email) no later than 5.00 p.m. (Bahrain time) on 28 November 2024 or such other date as notified by Infracorp in its sole discretion (the Expiration Deadline), which instruction will be irrevocable from such time. This Instruction Email must include (1) the name of the relevant holder of the Hybrid Certificates along with its proof of holding to the satisfaction of Infracorp (which includes a copy of a Euroclear or Clearstream, Luxembourg statement of account together with a letter from its custodian (if applicable) as evidence of its holdings) (Proof of Holding) as at the date of the Instruction Email; (2) an offer by the relevant holder to exchange its Hybrid Certificates for New Senior Sukuk; (3) the aggregate face amount of the Hybrid Certificates held by the relevant holder which are the subject of the Instruction Email (such amount cannot be less than U.S.$200,000 and integral multiples of U.S.$1,000 thereafter); (4) a confirmation by the relevant holder that it will not transfer the aggregate face amount of the Hybrid Certificates held by it which are the subject of the Instruction Email unless the Exchange Offer is terminated by Infracorp (in its sole discretion); (5) details of the Euroclear or Clearstream, Luxembourg account through which the relevant Hybrid Certificates are held by, or on behalf of, such holder; (6) details of the Euroclear or Clearstream, Luxembourg account through which the relevant New Senior Sukuk will be held by, or on behalf of, such holder; and (7) the name, telephone and email address of a contact person.

* Please note that the deadlines set by any intermediary will be earlier than the above deadlines

Please note that Infracorp may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the Exchange Offer at any time (subject to applicable law). In addition, offers of Hybrid Certificates for exchange may be rejected in the sole discretion of Infracorp for any reason and Infracorp is under no obligation to holders to furnish any reason or justification for refusing to accept an offer of Hybrid Certificates for exchange.

In addition, with respect to the CS, Infracorp will be sending holders of the Hybrid Certificates (via email only) a form of the written resolution (the Written Resolution) to be signed by or on behalf of such holders. Please note that to the extent you did not receive this notice directly via an email from Infracorp, then please provide your email address to Infracorp (to the contact person listed below) in order to ensure that you may receive the form of the Written Resolution.

Questions and requests for assistance in connection with the Exchange Offer and/or the delivery of Instruction Emails may be directed to the following personnel at Infracorp:

Additional notice in relation to the Sustainable Sukuk Framework

Infracorp has finalized a Sustainable Sukuk Framework (the Sustainable Sukuk Framework) and a second party opinion in relation to the Sustainable Sukuk Framework will be provided by Sustainalytics (the Second Party Opinion). Each of the Sustainable Sukuk Framework and the Second Party Opinion will be made available on Infracorp's website at www.infracorp.bh.

As set out in the offering circulars dated 15 March 2022 and 28 March 2024 in relation to the Hybrid Certificates, Infracorp intended to use an amount at least equal to the amount received by it to develop, in whole or in part, projects and assets promoting the transition towards low-carbon, climate change resilient and environmentally sustainable economies as set out in its green sukuk framework summarised under "Description of Infracorp's Business-ESG and Green Sukuk Framework". However, in view of the finalization of the Sustainable Sukuk Framework, Infracorp now intends to allocate (to the extent not done so already) an amount at least equal to the amount of Hybrid Certificates that will remain outstanding (subsequent to the Exchange Offer) towards eligible green projects and/or eligible social projects as set out in the Sustainable Sukuk Framework.

Notwithstanding Infracorp's intention stated above, holders should be aware that Infracorp has no contractual obligation to allocate such amounts as stated in, or to provide the reports described in, the Sustainable Sukuk Framework.

DATED: 14 November 2024

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FORM OF INSTRUCTION EMAIL

[insert date which is no later than the Expiration Deadline]

To:                          Infracorp B.S.C. (c) [zaskar@infracorp.bh]

Subject:                 Exchange Offer - Instruction Email

Dear Sir or Madam

This email is delivered to you in accordance with the Notice to Holders of the Hybrid Certificates dated 14 November 2024 from, or on behalf of, Infracorp (the Notice). All words and expressions defined in the Notice shall (save as otherwise provided herein or unless the context otherwise requires) have the same meanings herein.

In connection with the Exchange Offer, [I/we]*, [insert name of relevant holder of Hybrid Certificates]/[insert name of relevant custodian]* [irrevocably offer]/[confirm as custodian on behalf of [insert name of relevant holder of Hybrid Certificates] that they have agreed to irrevocably offer] to exchange the aggregate face amount of Hybrid Certificates set out below which are currently [held by us]/[held by us on behalf of [insert name of relevant holder of Hybrid Certificates]] (the Offered Hybrid Certificates) for receipt of an equivalent aggregate face amount of the New Senior Sukuk.

[I/We]* confirm that as at the date hereof [insert name of relevant holder] is the legal and beneficial owner of the Offered Hybrid Certificates and [I/we]* attach to this email a copy of a Euroclear or Clearstream statement of account [together with a letter from our custodian (if applicable)]* as evidence of our/[insert name of relevant holder]*'s  holdings (Proof of Holding).

(* Please delete as applicable)

[I/we]*, [insert name of relevant holder of Hybrid Certificates]/[insert name of relevant custodian]* [hereby undertake/ hereby confirm as custodian on behalf of [insert name of relevant holder of Hybrid Certificates] that they have agreed to undertake] that the Offered Hybrid Certificates will not be transferred or sold unless the Exchange Offer is terminated by Infracorp (in its sole discretion).

Best regards,

[insert name and signature of relevant holder of Hybrid Certificates]/[insert name and signature of relevant custodian]

[Attachment: Proof of Holding to be attached]

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[Attachment to Notice from Infracorp - Termsheet (Exchange Offer)]