Narrative
Full Description
Project narrative
On February 12, 2021, the Agricultural Bank of China (Luxembourg) S.A. (ABC Luxembourg) entered into a €30,000,000 EUR Schuldschein loan agreement with ORPEA S.A. — a France-incorporated health and residential care company headquartered in Puteaux, France — for unspecified purposes. This unsecured loan carried a maturity period of five years and a final maturity date of February 17, 2026. Orpea experienced financial issues, with a major drop in its valuation and allegations of malpractice and abuse at its care homes alleged in a 2022 book. In February 2023, ORPEA announced a financial restructuring plan. ABC Luxembourg, as a lender to ORPEA, claimed €30,151,050.00 EUR in principal and interest before the opening judgement of claims (with additional interest accruing until contracted maturity in the Commercial Court of Nanterre. ORPEA's financial restructuring plan, made between ORPEA, French investors, and institutions representing unsecured creditors (like BOC) was approved by the Commercial Court of Nanterre; the plan involved capital increases, including convert 3.8 billion EUR of unsecured debt into capital, leaving Mutuelle assurance des instituteurs de France and Mutuelle d'assurance des professionnels de la santé with a 50.1% stake in ORPEA.
Staff comments
1. ORPEA S.A., now known as Emeis Group, is a healthcare company that provides services to patients and residents worldwide. ORPEA operates nursing homes, assisted living facilities, rehabilitation and mental health hospitals, post-acute care facilities, and offers home care services. The company was founded in 1989 and is headquartered in France. 2. The Schuldschein loan is a German law debt product. Schuldschein loans do not legally constitute a security: a Schuldschein is not a note or a bond. Instead, a Schuldschein loan constitutes a standardised loan contract under the German Civil Code which is evidenced by a certificate of indebtedness. The only legal function of the certificate of indebtedness is to evidence that the issuer of the certificate owes the amount set out within it (subject to its terms). The certificate does not constitute a payment claim in and of itself. Because a Schuldschein loan does not constitute a security, it cannot be listed or traded on a stock exchange. The Market Abuse Regulation, other post listing obligations and formal prospectus rules do not apply. Schuldschein loans can be secured or unsecured and can involve a single lender or multiple lenders. Typically a Schuldschein is unsecured and initially owing to a single lender who then syndicates it. This is especially the case where unregulated investors wish to invest in Schuldscheine, because investing into a Schuldschein in the "primary market" is a regulated banking activity in the form of bank lending.