Transaction Will Result in Strong Liquidity
Position and Significant De-leveraging Through Debt Reduction of
$1.3 Billion
To Implement Restructuring Plan, Lumileds
Commences Voluntary Prepackaged Chapter 11 Proceedings, Limited to
United States and Netherlands Operations
None of Lumileds’ Operations Outside of the
United States and the Netherlands Are Included in the Chapter 11
Process
Receives Commitments for $275 Million in
Debtor-in-Possession Financing Which Will Roll into 5-Year Exit
Facility
Global Operations Continue in Normal Course
Without Any Interruption or Impact Expected to Customers, Vendors,
Suppliers, and Employees
Lumileds Holding B.V. (“Lumileds” or the “Company”), a global
leader in innovative lighting solutions, announced today that it
has entered into a restructuring support agreement (the “RSA” or
the “Agreement”) with its lenders holding a significant majority of
the loans outstanding under its prepetition first lien debt
facility on the terms of a comprehensive financial restructuring
that would significantly de-leverage and strengthen its balance
sheet by over $1.3 billion, accelerate Lumileds’ growth, and enable
further investment in innovation to pursue additional strategic
opportunities through the injection of up to $275 million of
liquidity.
To efficiently implement the de-leveraging, a narrowly focused
prepackaged Chapter 11 plan (the “Plan”) involving only Lumileds’
U.S. and Dutch entities has commenced in the U.S. Bankruptcy Court
for the Southern District of New York (the “Court”). Lumileds’
European, Asian, and other foreign subsidiaries and affiliates are
not included in the filing and are unaffected by the Chapter 11
process. The Company has obtained the necessary support from its
lenders to confirm the Plan prior to commencing its proceedings and
expects to meet the requirements to confirm the Plan and emerge
from Chapter 11 within approximately sixty days.
“Over the past few years, we have been hard at work transforming
our cost structure and innovation pipeline, which has allowed us to
capitalize more effectively on future market trends as a leader in
the lighting industry,” said Matt Roney, CEO of Lumileds. “We have
proactively taken steps to de-leverage our balance sheet given the
ongoing challenges presented by global supply constraints,
COVID-related issues, and the crisis in Ukraine. This
recapitalization will enable us to further accelerate our efforts
as a market-leading innovator within the specialty lighting
industry. We believe that the most effective and efficient way to
accomplish this is through a prepackaged Chapter 11 process that
will be accompanied by a significant increase in our liquidity
position. We appreciate the support of our lenders, who recognize
the long-term value and enhanced potential Lumileds will create
with a strengthened balance sheet.”
BUSINESS AS USUAL
None of the Company’s business operations outside of the United
States and the Netherlands are part of the Chapter 11 proceeding.
The Company has filed "first day" motions to obtain the requisite
court authority for the Company to continue operating its
businesses and facilities in the ordinary course without disruption
to its customers, vendors, suppliers, or employees. As part of
these first day motions, the Company has sought court approval to
continue to pay all valid amounts owed to vendors and suppliers as
they come due. In addition, the Company expects that employees will
continue to receive their usual wages and benefits without
interruption.
“Our number one priority is to deliver never before possible
solutions for lighting, safety, and well-being,” added Mr. Roney.
“This comprehensive liquidity and de-leveraging solution will
enable us to be an even more attractive and stronger partner as we
continue to drive innovation in LED technology and offer new
products and solutions to our customers. I would like to thank all
of our valued employees, customers, vendors, suppliers, and
sponsors for their ongoing support.”
TERMS OF THE RESTRUCTURING SUPPORT
AGREEMENT
Under the terms of the RSA, the existing secured lenders are
expected to commit to support, and vote in favor of, a transaction
that, when executed, will reduce the Company’s funded debt by
approximately $1.3 billion, from approximately $1.7 billion to $400
million comprised of takeback debt and post-petition loans, which
will be combined into a 5-year exit facility.
The RSA also contemplates a commitment from certain of its
lenders of up to $275 million in debtor-in-possession (“DIP”)
financing, available as part of the Chapter 11 process. Subject to
the Court’s approval, the DIP financing, together with the
Company's available cash reserves and cash provided by operations,
is expected to provide sufficient liquidity for Lumileds to
continue meeting its ongoing obligations, including all obligations
to customers, vendors, and suppliers, as well as employee wages,
salaries, and benefits programs.
More information about Lumileds’ restructuring, including access
to Court documents, will be available at
https://dm.epiq11.com/Lumileds or by contacting Epiq Corporate
Restructuring, LLC, the Company’s noticing and claims agent at +1
800-497-9116 (for toll-free domestic calls) and +1 503-520-4495
(for tolled international calls) or emailing
Lumiledsinfo@epiqglobal.com.
Evercore is acting as investment banker for the Company; Paul,
Weiss, Rifkind, Wharton & Garrison, LLP, and Latham &
Watkins LLP are acting as corporate and restructuring counsel to
Lumileds, and AlixPartners, LLP, as financial advisor. PJT Partners
is acting as financial advisor for an ad hoc group of Lumileds’
lenders, and Gibson, Dunn & Crutcher LLP is acting as the
group’s legal counsel.
About Lumileds
Lumileds is a global leader in OEM and aftermarket automotive
lighting and accessories, camera flash for mobile devices,
MicroLED, and light sources for general illumination, horticulture,
and human-centric lighting. Our approximately 7,000 employees
operate in over 30 countries and partner with our customers to
deliver never before possible solutions for lighting, safety, and
well-being. To learn more about our company and solution
portfolios, please visit https://lumileds.com.
Certain statements in this press release are forward-looking
statements within the meaning of and made pursuant to the safe
harbor provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In addition, our management may, from time to time, make
forward-looking oral statements. All statements, other than
statements of historical facts, are forward-looking statements.
Forward-looking statements may be identified by the words
“believe,” “expect,” “anticipate,” “project,” “plan,” “estimate,”
“may,” “will,” “could,” “should,” “seek” or “intend” and similar
expressions. Forward-looking statements reflect our current
expectations and assumptions regarding our business, the economy,
and other future events and conditions and are based on currently
available financial, economic, and competitive data and our current
business plans. Actual results could vary materially depending on
risks and uncertainties that may affect our operations, markets,
services, prices, and other factors. While we believe our
assumptions are reasonable, we caution you against relying on any
forward-looking statements as it is very difficult to predict the
impact of known factors, and it is impossible for us to anticipate
all factors that could affect our actual results. Important factors
that could cause actual results to differ materially from those in
the forward-looking statements include, but are not limited to, our
ability to obtain the approval of the Bankruptcy Court with respect
to motions filed in the Chapter 11 cases and the outcomes of
Bankruptcy Court rulings and the Chapter 11 cases in general, the
effectiveness of the overall restructuring activities pursuant to
the Chapter 11 filings and any additional strategies that we may
employ to address our liquidity and capital resources, the actions
and decisions of creditors, regulators and other third parties that
have an interest in the Chapter 11 cases, restrictions on us due to
the terms of any debtor-in-possession credit facility that we may
enter into in connection with the Chapter 11 cases and restrictions
imposed by the Bankruptcy Court, the timing for resolving and any
impact of the network security incident, a weakening of global
economic and financial conditions, interruptions in the supply of
or increased cost of raw materials, the loss of, or difficulties
with the further realization of, cost savings in connection with
our strategic initiatives, the impact of our substantial
indebtedness, our failure to comply with financial covenants under
our credit facilities or other debt, pricing actions by our
competitors that could affect our operating margins, changes in
governmental regulations and related compliance and litigation
costs, and the other factors. All forward-looking statements are
expressly qualified in their entirety by this cautionary notice.
The forward-looking statements made by us speak only as of the date
on which they are made. Factors or events that could cause our
actual results to differ may emerge from time to time. We undertake
no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as otherwise required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220828005042/en/
For further information, please contact: FGS Global for
Lumileds Kal Goldberg/Frances Jeter 646-805-2005/832-680-5120
lumileds@fgsglobal.com
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