Diebold Nixdorf, a banking technology service provider, entered into a restructuring support agreement with certain of its financial stakeholders to effectuate a debt restructuring transaction. The restructuring is expected to reduce debt and leverage levels and provide additional liquidity to support ongoing operations and establish a long-term, sustainable capital structure for the company. Diebold Nixdorf will continue to pay vendors and suppliers through the expected restructuring process in the ordinary course of business.
Diebold Nixdorf entered into the agreement with creditors who hold a significant majority of the its outstanding secured term loan debt and secured notes, including approximately 80.4% of the company’s super-priority credit facility, approximately 79% of the company’s first lien term loan, approximately 78% of the company’s first lien notes and approximately 58.3% of the company’s second lien notes.
“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,” Octavio Marquez, chairman, president and CEO of Diebold Nixdorf, said. “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 restructuring support agreement contemplates the effectuation of a deleveraging transaction through, among other things, a pre-packaged Chapter 11 plan of reorganization to be filed by Diebold Nixdorf and certain of its subsidiaries (collectively, the “debtors”) contemporaneously with the commencement by the debtors of voluntary cases under Chapter 11 of Title 11 of the U.S. Bankruptcy Code, a scheme of arrangement to be filed by Diebold Nixdorf Dutch Holding (the “Dutch issuer”) and certain of the company’s subsidiaries contemporaneously with the commencement by the Dutch issuer of voluntary scheme proceedings under the Dutch Act on Confirmation of Extrajudicial Plans, and recognition of such scheme of arrangement pursuant to a case commenced under Chapter 15 of the U.S. Bankruptcy Code by the Dutch issuer.
Under the restructuring support agreement, the consenting creditors agreed, subject to certain terms and conditions, to support restructuring transactions that would result in the discharge of a significant portion of existing funded debt of Diebold Nixdorf and certain of its subsidiaries. The company’s outstanding common shares would be cancelled pursuant to the restructuring transactions, and holders thereof would not receive any recovery.
The restructuring support agreement provides that the debtors will seek approval of a $1.25 billion debtor-in-possession term loan credit facility as part of the Chapter 11 cases. Diebold Nixdorf will used the proceeds of the DIP facility to repay in full all obligations under the company’s super-priority credit facility, repay in full (or cash collateralize issued letters of credit) the company’s asset-based revolving credit facility, pay costs and reasonable and documented out-of-pocket fees and expenses related to the court-supervised restructuring proceedings, and fund the working capital needs and expenditures of the debtors and their non-debtor affiliates during the pendency of the court supervised restructuring proceedings. Holders of Diebold Nixdorf’s first lien term loan or first lien notes that wish to become a lender under the DIP facility and that execute the restructuring support agreement prior to 11:59 p.m. ET on June 2 will be eligible to receive a participation premium of their pro rata portion of 10% of the new common shares of the company that will be available for distribution to creditors under the plans.
The restructuring transactions remain subject to certain conditions, as well as the negotiation of further definitive agreements. Diebold Nixdorf expects the restructuring transactions to be consummated in Q3/23. The terms of the restructuring support agreement contemplate that the common shares of the restructured company will be listed on the New York Stock Exchange.
