In a significant move towards financial consolidation, payments technology leader Diebold Nixdorf has declared that it has signed a restructuring agreement with key financial stakeholders. The objective of this strategic decision is to facilitate a comprehensive debt restructuring process, aiming for a speedy and efficient resolution.
In accordance with the agreement, creditors will back restructuring transactions leading to the discharge of a substantial portion of the funded debt held by Diebold Nixdorf and some of its subsidiaries. The company’s existing common shares will be annulled as a part of these transactions.
The restructuring is designed to drastically diminish debt and leverage levels, providing significant additional liquidity to “support seamless ongoing operations and establish a long-term, sustainable capital structure for the payments technology giant”. Throughout this process, Diebold Nixdorf has pledged to continue regular payments to vendors and suppliers.
The aforementioned agreement includes creditors who possess a considerable majority of Diebold Nixdorf’s outstanding secured term loan debt and secured notes. These creditors hold approximately 80.4% of the company’s superiority credit facility, around 79% of its first lien term loan, approximately 78% of the first lien notes, and nearly 58.3% of the second lien notes.
Octavio Marquez, Diebold Nixdorf chairman, president and chief executive officer, said:
“Our company is focused on continuing our solid operational performance and delivering best-in-class products and services to banks and retailers around the world. With the support of our creditors, we have reached an agreement to restructure and strengthen our balance sheet, enhance liquidity and position Diebold Nixdorf for long-term success.
Our strengthened financial position also enables us to better serve our customers, employees, suppliers and partners. I am excited about the future of Diebold Nixdorf and all we will accomplish.”
The plan involves leveraging a pre-packaged chapter 11 reorganisation plan, to be filed by Diebold Nixdorf and some of its subsidiaries under the US Bankruptcy Code. Diebold Nixdorf’s Dutch subsidiary, Diebold Nixdorf Dutch Holding B.V., is expected to file a scheme of arrangement under the Dutch Act on Confirmation of Extrajudicial Plans. Any such voluntary scheme will be recognised under chapter 15 of the US Bankruptcy Code, should a case be pursued.
As a part of the agreement, the debtors are set to seek approval for a US$1.25 billion debtor-in-possession (DIP) term loan credit facility during the chapter 11 cases. The DIP facility proceeds are allocated for repaying existing obligations, settling costs associated with the restructuring proceedings, and funding working capital needs during the process. First lien term loan or first lien note holders who become lenders under the DIP facility and sign the agreement before the set deadline, will be eligible for a participation premium.
Although the restructuring transactions are contingent upon certain conditions and the finalisation of further definitive agreements, Diebold Nixdorf hopes to complete the process by the third quarter of 2023. Upon completion, the common shares of the restructured company are expected to be listed on the New York Stock Exchange.
Featured image credit: Octavio Marquez, Diebold Nixdorf chairman, president and chief executive officer . Background image edited from Freepik.
