Supply Chain News / 3PLs & 4PLs / Finance & Credit

Ceva Takes Debt Elimination Move

Financial recapitalization eliminate over €1.2 billion of consolidated net debt.

Ceva Group Plc, a leading non-asset based supply chain management company, announced it has reached agreement with the largest holders of its second lien notes and senior unsecured debt on a consensual financial recapitalization plan that will reduce substantially CEVA’s overall debt and interest costs. The move will also increase liquidity and strengthen Ceva’s capital structure.
The recapitalization will enable Ceva to better serve its customers, accelerate its growth throughout the world and fund the development of new supply chain products and services, according to the company.

Assuming successful completion of the Recapitalization, the company will reduce its consolidated net debt by more than €1.2 billion, reduce its annual cash interest expense by over €135 million or approximately 50 percent and will receive a capital infusion of at least €205 million for investment in its business plan.

“We have been working with our financial advisors over the past few months to develop a long-term financial plan for the company, exploring various options to improve our balance sheet to enhance the company’s financial flexibility in support of future growth.” said Marvin O. Schlanger, Ceva’s CEO.

He added, “We are pleased that a substantial majority of our creditors have already committed their support. Ceva anticipates a quick resolution to the transaction and will continue to provide customers with the effective and robust supply chain solutions and exceptional levels of service they have come to expect.”

In connection with the recapitalization, Cva has entered into a restructuring support agreement with parties representing approximately 83 percent of the outstanding principal amount of the 12.75 percent Senior Notes due 2020, the 12 percent Second-Priority Senior Secured Notes due 2014 and $113 million Senior Unsecured Bridge Loan and 69 percent of the outstanding principal amount of the 11.5 percent Junior Priority Secured Notes due 2018 for the approval of the recapitalization transaction.

The restructuring support agreement provides, subject to the terms and conditions thereof, for commitments to invest approximately €205 million by three parties, consisting of (i) investment funds affiliated with Apollo Global Management, LLC (NYSE: APO) that are creditors of Ceva, (ii) certain funds advised by Capital Research and Management Company that are creditors of Ceva and (iii) the Company’s largest institutional investor. These three parties will become the three largest shareholders of Ceva pursuant to the contemplated recapitalization.

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