Clover Technologies debt for equity swop
December 12, 2019
4L Holdings, operating as Clover Technologies Group has reached an agreement with its equity holders and lenders to substantially reduce debt and strengthen its financial position. The recent spin out of Clover Imaging means they will not be part of the financial restructuring process, including any Chapter 11 filing.
4L Holdings, which operates as Clover Technologies Group, announced that it, along with certain of its affiliates, has entered into a restructuring support agreement (the “Agreement”) – that will equitise all of the Company’s approximately $644 million (€579 million) in long-term debt, with the majority of its equity holders and a group of its lenders representing over 67% of its outstanding long-term debt.
In addition to the restructuring, the Agreement also supports two recently announced strategic transactions: Clover Wireless’ acquisition of Teleplan, which closed on 4 December 2019, and the sale of Clover Imaging to Norwest Equity Partners, which was announced on 21 November 2019, and is expected to close in mid-December 2019.
Upon consummation of the sale of Clover Imaging, the proceeds from the sale will be used to pay down a portion of 4L’s current outstanding long-term debt.
“Collectively, these actions are important, positive steps forward for our company, and are designed to put our company on strong financial footing as we embark on our next chapter,” said Dan Perez, CEO of Clover Wireless. “Once the restructuring support agreement and strategic transactions are finalised, we will be a nimbler and more focused company, and we will be well positioned for long-term success. We will have a right-sized balance sheet that supports our growth and further investment in our technology and capabilities. We appreciate the constructive discussions we’ve had with our lenders and sponsors and are grateful for their support and confidence in our refocused strategic plan.”
Under the Agreement, the comprehensive financial restructuring of 4L, the parent company of Clover Wireless, is expected to be implemented through a pre-packaged chapter 11 plan of reorganisation (the “Plan”) that would be filed shortly.
The company said it has already received significant support for the Plan from a group of its lenders and equity holders, who have consented to the transaction in the Agreement, and is currently in the process of soliciting additional support from all of its lenders and equity holders, with the goal of obtaining consensus. As a result, it is expected that 4L will be able to complete its financial restructuring process quickly.
In addition, the Company’s operations are expected to continue as usual throughout the financial restructuring process. 4L’s non-US subsidiaries and affiliates, including Teleplan, are not expected to be included in the financial restructuring process, including any chapter 11 filing, or affected by the process. Clover Imaging will not be part of the financial restructuring process, including any Chapter 11 filing.
Mr Perez continued, “I want to thank all of our valued stakeholders for their ongoing support. During this time, the Clover Wireless and Teleplan businesses will operate without disruption to employees, customers, partners and vendors.”
Kirkland & Ellis LLP is serving as 4L’s legal counsel, Jefferies LLC is serving as its financial advisor and Alvarez & Marsal is serving as restructuring advisor. Gibson, Dunn & Crutcher LLP is acting as legal counsel for the ad hoc group of term loan lenders and Greenhill & Co. is acting as its financial advisor.
Clover Imaging Group (CIG) reconfirmed that it will not be part of the financial restructuring process, including any Chapter 11 filing stating: “As announced on 21 November 2019, Clover Imaging Group’s executive leadership team and Norwest Equity Partners announced the acquisition of the Clover Imaging Group business unit from 4L Holdings Group. Following the close of the transaction, Clover Imaging Group will be a separate and independent company. There will be no shared financials, facilities, operations, or personnel with 4L Holdings Group or Clover Wireless.
“We are confident that the acquisition will close in the very near future. As we communicated in November when we announced the agreement with Norwest Equity Partners, following the close of the transaction, Clover Imaging Group will have a conservative capital structure and greatly enhanced financial flexibility. We are committed to our go-to-market strategy and excited for the opportunities in front of us,” said Jim Cerkleski, Chairman, Clover Imaging Group.
CIG said it will provide further updates when the acquisition closes.
Categories : City News
Tags : 4L Holdings Business CIG Refinancing
