‍Lumileds, a manufacturer of automobiles and other LED lighting products in which Apollo Global Management (APO.US) holds about 80% of the shares, announced that it has reached a comprehensive financial restructuring agreement with the necessary creditors. This transaction will achieve $1.3 billion in debt reduction and provide the company Enhanced liquidity and significantly reduced leverage.

In order to implement the reorganization plan, Lumileds has voluntarily applied for a planned bankruptcy reorganization protection in accordance with Chapter 11 of the U.S. Bankruptcy Code, which is limited to the business in the United States and the Netherlands.

Lumileds Holding B.V. ("Lumileds" or the "Company"), a leading global company in innovative lighting solutions, today announced that it has reached a restructuring on the terms of a comprehensive financial restructuring with its creditors for the majority of outstanding loans under the pre-application first lien debt financing facility Restructuring Support Agreement ("RSA" or "Agreement").

This financial restructuring will significantly reduce the company's leverage and strengthen its balance sheet by over $1.3 billion (helping reduce debt by $1.3 billion), which will accelerate the company's growth, while at the same time, through the new injection of liquidity of up to $275 million The funds will empower the company to further invest in innovation to pursue more strategic opportunities.

In order to effectively reduce the leverage ratio, Lumileds has applied to the U.S. Bankruptcy Court for the Southern District of New York (the "Court") under Chapter 11 of the U.S. Bankruptcy Code for a narrowly focused, planned bankruptcy protection and submitted a relevant plan (the "Plan"), which only covers Involves Lumileds corporate entities in the US and the Netherlands. European, Asian and other foreign subsidiaries and affiliates of Lumileds are excluded from this application and are not affected by the relevant procedures.

Before launching the application, the company has obtained the necessary support from creditors and plans to confirm the reorganization plan in about 60 days and exit the bankruptcy protection process.

Matt Roney, CEO of Lumileds, said: "As a leader in the lighting industry, over the past few years, we have worked hard to improve our cost structure and innovation pipeline to effectively benefit from market trends. Global supply constraints, COVID-19 The pandemic and the Ukrainian crisis have created ongoing challenges, so we have taken proactive steps to reduce our leverage. This recapitalization will allow us to further strengthen our position as a market-leading innovator in the professional lighting industry. We believe that achieving this The most effective and efficient way to achieve this goal is through this planned bankruptcy reorganization, which will also be accompanied by a substantial increase in the company's liquidity. We appreciate the support of creditors who also believe that a Lumileds with a stronger balance sheet, It will have longer-term value and greater development potential.”

Lumileds said the company's business operations outside the U.S. and the Netherlands were excluded from the restructuring. The Company has filed first day motions (“first day” motions) seeking court authorization to enable the Company’s business and equipment to continue to operate as normal without impact to customers, suppliers, suppliers and employees. As part of the first-day motion, the company has sought court approval to continue to make all payments to suppliers and suppliers on schedule. In addition, the company plans to pay employee salaries and benefits as usual without interruption.

Mr. Roney also said: "Our priority is to provide unprecedented solutions for lighting, safety and health. This comprehensive de-leveraging and enhanced liquidity scheme will make us a more attractive and stronger partner, Continue to drive innovation in LED technology and provide customers with new products and solutions."

Under the terms of the restructuring support agreement, existing secured creditors will commit to support and vote on a transaction. When executed, the deal will reduce Lumileds' long-term debt by $1.3 billion through a debt-to-equity swap, reducing the company's debt from about $1.7 billion to $400 million. The $400 million will consist primarily of repurchased debt and (financial restructuring) loan applications, entering a five-year exit mechanism.

The restructuring support agreement also includes up to $275 million in debtor-in-possession (DIP) financing committed by some creditors as part of the restructuring process. If approved by the court, the DIP financing, combined with the company's available cash reserves and operating cash receipts, is expected to provide Lumileds with sufficient liquidity to continue to meet all of its obligations to customers, suppliers and suppliers, as well as for employees Pay salary and benefits.

Source: Lumileds