Exela Technologies amends offer to swap 11½% notes due 2026

By Mary-Katherine Stinson

Lexington, Ky., June 30 – Exela Technologies, Inc. amended its offer to exchange any and all of the outstanding 11½% first-priority senior secured notes due 2026 issued by Exela Intermediate LLC and Exela Finance Inc. into new 11½% first-priority senior secured notes due 2026 issued by the same issuers, according to an 8-K filing with the Securities and Exchange Commission.

The early tender time, which was extended several times, has now been eliminated.

The early settlement time has also been eliminated, and the withdrawal deadline has been extended through the expiration of the offer at 11:59 p.m. ET on July 7.

Exela reported that $1,270,200,000 of the notes have been tendered for exchange as of 5 p.m. ET on June 29. This is an increase from the approximately $955.5 million of outstanding old notes that were tendered as of the original early tender time.

The early tender time was previously extended to 5 p.m. ET on June 29 from 5 p.m. ET on June 22. The original withdrawal deadline was 5 p.m. ET on June 22.

As previously reported, for each $1,000 principal amount of old notes tendered, holders will be eligible to receive $800 principal amount of new notes. At the outset of the offer, this premium was only for those holders who tendered before the early deadline. It now will extend through the expiration of the offer.

Originally, holders tendering after the early deadline were to be only eligible to receive $750 principal amount of new notes per $1,000 principal amount of old notes, though that is no longer relevant.

Consent requirements were satisfied by the original early tender deadline.

Holders cannot tender their old notes under the exchange offer without delivering a consent under the related consent solicitation, and alternatively holders cannot deliver their consents without tendering their notes for exchange. Details of the consent solicitation were not disclosed in the press release.

No consideration will be paid for consents in the consent solicitation.

Conditions, more details

As previously reported, the tender offer is conditioned on, among other things, the tender of at least 66.67% in aggregate principal amount of outstanding old notes. The minimum tender condition may not be waived by the issuers.

As at least 66.67% of the old notes have been tendered, the provisions containing the restrictive covenants and events of default for the old notes will be eliminated, and the collateral for the old notes will be released.

Accordingly, upon closing and settlement of the offer, all new notes will be structurally senior to the old notes with respect to the collateral. Therefore, claims with respect to the old notes will be effectively subordinated to claims with respect to the new notes and the senior facilities to the extent of the value of the collateral and, in the event of a bankruptcy, liquidation or insolvency, there would be fewer assets remaining from which the claims of the old notes could be satisfied.

Tendered old notes will not receive a cash payment for the accrued interest from the last applicable interest payment date to the settlement date. Instead, that accrued interest will be carried over to the new notes, which will accrue interest from Jan. 15.

The new notes will mature on April 15, 2026, provided that if any of the issuers’ existing notes due in 2023 or term loans due in 2023 remain outstanding on July 12, then the new notes will also mature on July 12, 2023.

Under a support agreement entered into with several eligible holders of old notes, which, together with some of their respective affiliated funds, hold 54.1% of the outstanding principal amount of the old notes, those holders agreed to tender all of their notes in the exchange offer before the offer started.

All old notes held by Exela and its affiliates were to be tendered in the offer as well.

Holders of old notes who are either qualified institutional buyers under Rule 144A or not a U.S. person under Regulation S are eligible to participate in the tender offer and related consent solicitation.

The information agent for the offer is D. F. King & Co., Inc. (800 290-6432 or 212 269-5550; http://www.dfking.com/exela; exela@dfking.com).

Exela is an Irving, Tex.-based business process automation company.

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