Selina convertible noteholder seeks damages over failure to pay

By Marisa Wong

Los Angeles, March 20 – Selina Hospitality plc was informed on March 19 that on March 11 Dark Forest Capital Management LP filed a motion for summary judgment in lieu of complaint in the Supreme Court of New York seeking damages relating to Selina’s failure to make certain payments due under its 6% convertible senior notes due 2026, according to a 6-K filing with the Securities and Exchange Commission.

According to the notes’ indenture, payment of interest was due on Nov. 1 and the failure of the company to pay the interest payment within a 30-day grace period constituted an event of default that, in addition to other remedies, allowed either Wilmington Trust, NA as trustee or the holders of at least 25% in aggregate principal amount at maturity of the notes then outstanding to accelerate the repayment of amounts due.

Selina announced on Feb. 5 that it had received a notice from a holder of more than 25% of the principal amount of the notes informing the company that the holder was purporting to exercise its right to accelerate the outstanding principal amount of, premium (if any) on and accrued interest due under all of the notes.

According to the memorandum of law filed in support of the motion, Dark Forest alleges that it holds $12.53 million aggregate principal at maturity of the notes – representing more than 52% of the aggregate outstanding principal amount – and is entitled to payment of $11,401,634.87, being the sum of the accreted principal amount of the notes held by the plaintiff and interest accrued as of the date of acceleration, Feb. 2, plus additional interest accruing through the date of judgment.

Selina continues to engage with Dark Forest and other relevant noteholders to discuss potential settlement arrangements and is assessing its legal position.

There can be no assurances that such discussions will result in a successful outcome, and the company may need to consider formal restructuring options in relation to the debt due under the 2026 notes and its other liabilities, according to the 6-K.

The hospitality company is based in London.

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