Deluxe Takes Final Steps to Complete Comprehensive Financial Restructuring
Deluxe Entertainment Services Group Inc. has announced that it is taking the final steps in its previously announced comprehensive financial restructuring process that, once completed, will reduce the Company’s long-term debt by well more than half and raise USD$115 million of new financing. As the Company finalises the process in the coming weeks, Deluxe’s day-to-day operations will continue without interruption and with no impact on employees, customers and vendors.
Deluxe previously entered into a restructuring support agreement that contemplated the exchange of all of the Company’s existing term loan debt and priming term loan debt for, in the aggregate, 100 percent of the reorganised company’s common stock. All parties involved determined that the best way to implement the debt-for-equity exchange is through a controlled, efficient Court-supervised process The Company has now taken steps to start that process.
“We have been working to put Deluxe in a strong financial position, and these steps are the best and most efficient way to finalize and implement the comprehensive financial restructuring,” said John Wallace, Chief Executive Officer of Deluxe. “This process will allow us to strengthen our balance sheet and gain the financial flexibility and resources to drive investment in key growth strategies with no disruption to our business and no impact to our employees, customers, vendors and other business partners.”
Deluxe commenced the formal process of soliciting votes from lenders in support of the comprehensive financial restructuring and filed pre-packaged cases under Chapter 11, outlining a proposed plan of reorganisation that details the terms of the financial restructuring, including the debt-for-equity exchange. Deluxe has requested that the Court schedule a confirmation hearing to approve the Plan on October 24, 2019 and expects to implement the transaction shortly thereafter. Once completed, the Company expects to emerge from the refinancing process with significantly less debt and additional new financing to support its operations and investments.
Kirkland & Ellis, LLP is acting as legal counsel for the Company, and PJT Partners is acting as its financial advisor. FTI Consulting, Inc. is acting as financial advisor for a majority group of its senior lenders, and Stroock & Stroock & Lavan LLP is acting as their legal counsel.
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