Diebold Nixdorf entered into a restructuring support agreement with certain of its key financial stakeholders to effectuate a comprehensive debt restructuring transaction that is intended to be completed efficiently and quickly. The restructuring is expected to significantly reduce debt and leverage levels and provide substantial additional liquidity to support seamless ongoing operations and establish a long-term, sustainable capital structure for the Company. The Company will continue to pay vendors and suppliers through the expected restructuring process in the ordinary course of business.
The Company has entered into this agreement with creditors who hold a significant majority of the Company's outstanding secured term loan debt and secured notes (the "Consenting Creditors"), including approximately (a) 80.4% of the Company's superpriority credit facility; (b) approximately 79% of the Company's first lien term loan; (c) approximately 78% of the Company's first lien notes; and (d) approximately 58.3% of the Company's second lien notes.
Octavio Marquez, Diebold Nixdorf chairman, president and chief executive officer, said: "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. 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, (i) a pre-packaged chapter 11 plan of reorganization to be filed by the Company 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, (ii) a scheme of arrangement to be filed by Diebold Nixdorf Dutch Holding B.V. (the "Dutch Issuer") and certain of the Company's subsidiaries contemporaneously with the commencement by Dutch Issuer of voluntary scheme proceedings under the Dutch Act on Confirmation of Extrajudicial Plans (Wet homologatie onderhands akkoord) and (iii) 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 have 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 the Company 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 (the "DIP Facility") as part of the chapter 11 cases. The proceeds of the DIP Facility will be used to (i) repay in full all obligations under the Company's superpriority credit facility; (ii) repay in full (or cash collateralize issued letters of credit) the Company's asset-based revolving credit ABL facility; (iii) pay costs and reasonable and documented out-of-pocket fees and expenses related to the court-supervised restructuring proceedings; and (iv) 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 the Company'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., New York City time, on June 2, 2023 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. The Company expects the restructuring transactions to be consummated in the third quarter of 2023. 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.