PRESS RELEASE
CURO Group Holdings Corp. (OTC: CURO) (“CURO” or the “Company”) today announced that, on March 22, 2024, it entered into a Restructuring Support Agreement (“RSA”) that is supported by holders (or their investment managers) of more than 74% of each of: (i) loans under the Company’s First Lien Credit Agreement (“1L Lenders”), (ii) the Company’s 7.500% Senior 1.5 Lien Secured Notes due 2028 (the “1.5L Notes” and, such parties, the “1.5L Noteholders”), and (iii) the Company’s 7.500% Senior Secured Notes due 2028 (the “2L Notes” and, such parties, the “2L Noteholders”).
To implement the terms of the RSA, CURO and certain subsidiaries have filed for voluntary relief under Chapter 11 (the “Chapter 11 Cases”) of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”). Prior to commencing the Chapter 11 Cases, the Company also commenced solicitation of the 1L Lenders, the 1.5L Noteholders, the 2L Noteholders and holders of CURO’s common stock for votes for a prepackaged joint plan of reorganization of the Company and certain of its subsidiaries (the “Plan”), which Plan has been filed contemporaneously with the filing of the Chapter 11 Cases. CURO also intends to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act.
The RSA sets forth terms for a consensual restructuring plan that is expected to reduce the Company’s debt by approximately $1 billion, saving the Company approximately $75 million in cash interest annually and enabling CURO to invest in long-term growth. CURO branches are open, operating as usual and continuing to serve customers in the U.S. and Canada. Customer loans are unaffected by the filing.
“Implementing this restructuring through a court-supervised process is the most efficient path to enable us to make changes to our capital structure that will allow us to continue to grow responsibly, execute with excellence and solidify the foundation of the Company,” said Doug Clark, Chief Executive Officer at CURO. “The significant support we have received from our lenders and stakeholders will allow us to move forward expeditiously as we continue to provide our customers with a variety of convenient, easily accessible financial services. We are confident in our ability to successfully exit this process as a stronger company with significantly less debt and we will be better positioned to achieve long-term profitable growth.
“We are grateful for the ongoing support of our vendors, landlords and business partners. With the changes that will result from this process, our future is bright.”
A steering committee comprised of funds managed by Oaktree Capital Management, LP. (“Oaktree”), Caspian Capital LP, and Empyrean Capital Partners (the “Ad Hoc Group”) led negotiation of the RSA on behalf of creditors. “I want to express my gratitude to the CURO team, both in the U.S and Canada, for their hard work and dedication,” David Smolens, Managing Director in Oaktree’s Special Situations Group said. “We look forward to working with and supporting CURO as it moves on to its next chapter.”
CURO has filed a number of customary motions with the Bankruptcy Court to ensure that its operations continue uninterrupted while its balance sheet is restructured.
CURO has also received a commitment of up to $70 million of new capital in the form of debtor-in-possession (“DIP”) financing from certain of the Company’s prepetition stakeholders, subject to satisfaction of certain customary conditions. The DIP financing, which is subject to court approval, is expected to support the Company’s ongoing operations during the court-supervised process.
Given the broad support of lenders, CURO expects to receive Bankruptcy Court approval of a Plan of Reorganization and Disclosure Statement expeditiously and it expects to emerge from the restructuring process in no later than 120 days.
In connection with the Chapter 11 Cases, the applicable non-debtor subsidiaries of the Company also entered into waivers and amendments with the lenders under the Company’s existing loan receivables securitization programs. These accommodations ensure that such securitization programs remain in effect notwithstanding the filing of the Chapter 11 Cases and are able to continue, with certain negotiated modifications, following the Company’s emergence from Chapter 11.
Additional information regarding the Company’s court-supervised process is available at CURO’s restructuring website, https://dm.epiq11.com/Curo.
Court filings and other information related to the proceedings are available on a separate website administered by the Company’s claims agent, Epiq, at https://dm.epiq11.com/Curo, by calling Epiq toll-free at (877) 354-3909 (or (971) 290-1442 for calls originating outside of the U.S.), or by sending an email to CURO@epiqglobal.com.
Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel to the Company, Cassels Brock & Blackwell LLP is serving as Canadian legal counsel to the Company, and Oppenheimer & Co. Inc., is serving as investment banker to the Company. Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP are serving as legal counsel to the Ad Hoc Group, and Houlihan Lokey Capital, Inc. is serving as financial advisor to the Ad Hoc Group.
