| (a) | This Schedule 13D is filed jointly by Avenue RP Opportunities Fund, L.P., a Cayman Islands exempted limited partnership; Avenue Global Dislocation Opportunities Fund, L.P., a Cayman Islands exempted limited partnership; Avenue Global Opportunities Master Fund LP, a United Arab Emirates limited partnership; Avenue Europe International Management, L.P., a Delaware limited partnership; Avenue Capital Management II, L.P., a Delaware limited partnership; Avenue RP Opportunities Fund GenPar, LLC, a Delaware limited liability company; Avenue Global Dislocation Opportunities GenPar, LLC, a Delaware limited liability company; Avenue Global Opportunities GenPar Holdings Ltd, a United Arab Emirates limited liability company; GL RP Partners, LLC, a Delware limited liability company; GL Global Dislocation Opportunities Partners, LLC, a Delaware limited liability company; and Marc Lasry, an individual and citizen of the United States, who are collectively referred to herein as "Reporting Persons". |
| | The Restructuring
On March 3, 2025, Exela Technologies BPA, LLC and certain of its subsidiaries and affiliates (collectively, the "Debtors") commenced voluntary cases under Chapter 11 of Title 11 of the United States Code 101-1532 (the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). On June 23, 2025, the Bankruptcy Court entered an order confirming the Debtors Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (as amended, the "Plan"). On July 3, 2025, the Issuer entered into a Transaction Support Agreement (the "Transaction Support Agreement") with Excela Technologies BPA, LLC, pursuant to which the Issuer agreed to support the Plan and to take actions necessary to facilitate the restructuring transactions contemplated therein. On July 29, 2025 (the "Effective Date"), the Plan became effective.
As of the Effective Date, the Reporting Persons held an aggregate of $120,923,191 principal amount of 11.5% first-priority senior secured notes due April 15, 2026 (the "April 2026 Notes") issued by Exela Intermediate, LLC and Exela Finance, Inc. On the Effective Date, the April 2026 Notes were exchanged for 10,461,180 shares of Common Stock pursuant to the terms of the Plan.
Prior to the Effective Date, to facilitate the consummation of the Plan, certain of the Reporting Persons funded a portion of an aggregate principal amount of $80 million (the "New Money Loans") under the Debtors' senior secured super-priority priming debtor-in-possession credit facility (the "DIP Facility"). Pursuant to the Plan, on the Effective Date the Reporting Persons received 12.000% First-Priority Senior Secured Notes due 2030 (the "Rollover Exit Notes") issued pursuant to an indenture entered into by and among Exela Technologies BPA, LLC, Exela Finance Inc., the guarantors party thereto, U.S. Bank Trust Company, National Association, as trustee, and Ankura Trust Company, LLC, as collateral agent, in exchange for their claims under the DIP Facility. The Reporting Persons received an aggregate of $47,621,506 principal amount of Rollover Exit Notes.
Additionally, in connection with the New Money Loans, the Reporting Persons provided a backstop commitment related thereto, and were granted a backstop fee paid in shares of 1,448,038 shares of Common Stock, which the Reporting Persons received on the Effective Date.
Further, on the Effective Date, certain of the Reporting Persons funded an aggregate of $1 million under Exela Technologies BPA, LLC's exit financing agreement, a super senior secured loan agreement in the amount of $46 million, represented by $40 million of new loans and $6 million of take-back loans provided to certain other lenders under the DIP Facility.
Pursuant to the Plan, an ad hoc group of holders of the April 2026 Notes (the "Consenting Creditors"), which included the Reporting Persons, was granted a one-time right to designate four nominees for appointment to the board of directors of the Issuer upon consummation of the plan on behalf of all the recipients of common stock under the Plan, with a lead independent director selected from the independent directors by a majority vote of the directors. In connection with the foregoing appointmentss, two members of the Issuer's board of directors, Messrs. Akins and Clark, resigned effective on the Effective Date. The four directors appointed by the Consenting Creditors were Regina Paolillo, Robert D. Pryor, Sanjay Srivastava and Randal T. Klein. Mr. Klein is a Senior Portfolio Manager - Global Funds at Avenue Capital Management II, L.P.
Registration Rights Agreement
Pursuant to the Plan, on the Effective Date, the Issuer entered into a registration rights agreement (the "Registration Rights Agreement") granting registration rights to the certain shareholders, including the Reporting Persons, in respect of the Common Stock received under the Plan. The Registration Rights Agreement grants rights to the Reporting Persons to register the Common Stock received under the Plan, including through shelf registrations on Form S-3 or Form S-1, which the Issuer must file and maintain effective to allow resale of the shares of Common Stock on a delayed or continuous basis. The Reporting Persons may request demand registrations for their shares, provided the offering meets certain financial thresholds, and will be entitled to participate in piggyback takedowns when the Issuer registers its own securities or those of other shareholders. The Registration Rights Agreement includes provisions for underwritten transactions, lock-up periods restricting sales before and after offerings, and the Issuer's undertakings to facilitate registrations, cover registration expenses, and provide indemnification and contribution for liabilities arising from registration statements. The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the Registration Rights Agreement, a copy of which is included as Exhibit 99.2 to this Schedule 13D, and is incorporated by reference herein.
The Reporting Persons acquired the securities reported herein for investment purposes. In his role as a director of the Issuer, Mr. Klein will engage, and the Reporting Persons may engage, in discussions, including, without limitation, with management of the Issuer, its board of directors, other shareholders of the Issuer and other relevant parties concerning the business, operations, board composition, management, strategy or control and future plans of the Issuer. The Reporting Persons from time to time intend to review their investment in the Issuer on the basis of various factors, including Issuer's business, financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Common Stock in particular, as well as other developments and other investment opportunities. Based upon such review, the Reporting Persons will take such actions in the future as they may deem appropriate in light of the circumstances existing from time to time, which may include disposal of some or all of the shares of Common Stock currently owned by the Reporting Persons or otherwise acquired by them pursuant to conversion of debt or in privately negotiated transactions. Any such transactions may be effected at any time or from time to time subject to any applicable limitations imposed on the sale of the Common Stock by applicable law.
Except to the extent the foregoing may be deemed a plan or proposal, the Reporting Persons have no additional plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of the Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.
|
| | The information set forth in Item 4 of this Schedule 13D is incorporated herein by reference.
Except as reported herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Persons or, to the best of its knowledge, any other person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.
Pursuant to Rule 13d-1(k) promulagted under the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into an agreement with respect to the joint filing of this Schedule 13D, which agreement is attached as Exhibit 99.1 to this Schedule 13D.
|
