February 22nd 2024
Paris, February 22, 2024 – 7 am (CET)
CARMAT (FR0010907956, ALCAR), designer and developer of the world’s most advanced total artificial heart, aiming to provide a therapeutic alternative for people suffering from advanced biventricular heart failure (the “Company” or “CARMAT”), today provides an update on the renegotiation of the repayment terms of its loans with its financial creditors.
Conditional agreement in principle with the European Investment Bank (“EIB”)
As a reminder, CARMAT reached a conditional agreement in principle with the EIB[1] in January 2024 regarding all three tranches of its loan[2]. This agreement notably provides for the postponement of the due date for the first tranche of the loan (total amount of approximately €15 million[3] in principal and interest) to July 31, 2026, as well as the postponement of the due dates for the other two tranches, respectively to August 2027 and October 2028.
If implemented, this agreement would allow CARMAT to avoid having to repay this loan before July 31, 2026[4]. As a reminder, the first tranche of the loan was initially due on January 31, 2024, and the second and third tranches in 2025 and 2026, respectively.
This agreement in principle is not binding at this stage, as it is in particular subject to the conclusion of a rescheduling agreement for the State-Guaranteed Loans (PGE) contracted by the Company with BNP Paribas (BNPP) and Bpifrance (BPI), for a total principal amount of €10 million[5].
Agreement in principle on the rescheduling of State-Guaranteed Loans
During February 2024, CARMAT obtained an agreement in principle from both BNP Paribas and Bpifrance on the rescheduling of the two PGEs contracted with these banks, the initial maturity of which was set for the fourth quarter of 2026. This agreement is itself conditional, notably on the implementation of the agreement reached with the EIB.
Extension of the standstill to allow the finalization of a final agreement with all financial creditors by March 22, 2024
To facilitate the finalization of the discussions with the banks, the standstill applicable to the principal of the various loans, which had previously been granted by the EIB, BNPP, and BPI until February 22, 2024, has been extended until March 22, 2024.
By that date, the Company anticipates reaching a final agreement on the rescheduling of all its financial debts contracted with the EIB, BNP Paribas, and Bpifrance.
In such a case, given this agreement and its cash position, the Company could, based on to its current business plan, fund its activities until mid-May 2024, and estimates its financing needs over the next 12 months at approximately €35 million.
However, it is not guaranteed that such an agreement will be reached by March 22, 2024. In this scenario, which the Company does not consider the most likely, CARMAT could have its cash runway reduced to March 22, 2024, and its financing needs over the next 12 months increased to approximately €50 million.
The Company carries on working very actively on other initiatives to strengthen its equity and alleviate its cash constraints in the short term.
Stéphane Piat, CEO of CARMAT, comments: “The agreements in principle reached with the EIB on one hand, and BNP Paribas and Bpifrance on the other hand, regarding new repayment terms for their respective loans, represent a very positive development.
I am confident that by March 22, the discussions with these three banks will get finalised and a final agreement on the rescheduling of all our financial debts will be reached.
I would like to thank again our three banking partners for their commitment by our side.”
[1] Press Release from January 12, 2024, regarding the conditional agreement in principle with the EIB
[2] Under a contract concluded on December 17, 2018, the Company secured a loan from the EIB amounting to €30m disbursed in 3 tranches of €10m each, on January 31, 2019 (the “first tranche”), May 4, 2020 (the “second tranche”), and October 29, 2021 (the “third tranche” and, together with the other tranches, the “tranches”), each tranche to be repaid, in principal and interest, 5 years after its disbursement to the Company.
[3] Principal of €10m and interest of approximately €5m
[4] Except in cases of default or early repayment, which would remain unchanged.
[5] Two State-Guaranteed Loans (PGE) contracted in the fourth quarter of 2020, respectively from BNP Paribas and Bpifrance, with a principal amount of €5m each, amortizable from the fourth quarter of 2022 to the fourth quarter of 2026.