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June 2, 2023 – The Court hearing the Diebold Holding Company cases issued an order authorizing the Debtors to (i) access $517.0mn of new money debtor-in-possession ("DIP") financing and (ii) use cash collateral [Docket No. 90, with DIP Credit Agreement attached at Exhibit 1].
The current new money DIP financing is part of a $1.25bn DIP term loan facility comprised of two tranches: (a) Tranche B-1 consists of a $760.0mn term loan that will be utilized to refinance the 2026 ABL Facility and the FILO Facility (see "Indebtedness" table below) while also providing $517.0mn of new liquidity to the Debtors and (b) Tranche B-2 consists of a $490.0mn term loan that will be utilized to refinance the 2025 Superpriority Term Loan Facility.
Both Tranche B-1 and Tranche B-2 have been fully funded with this interim DIP order.
At the Debtors' first day hearing, Judge David R. Jones initial's reaction to the very expensive financing (see detail of interest and premiums below) was skeptical, but he was ultimately convinced the Debtors' need to immediately refinance prepetition obligations and to be able to access (equally expeditiously) significant levels of cash necessary to maintain relationships with vendors (and keep them from filing actions against the Debtors' foreign subsidiaries in foreign courts)….justified the cost.
As described in the Debtors' DIP motion and a declaration filed in support of the DIP financing by investment banker Ducera Partnes LLC ("Ducera," see below), the Debtors needed to concentrate their restructuring in a U.S. bankruptcy court without worrying that those restructuring efforts could be delayed or derailed by creditors outside of the U.S. bankruptcy process. That certainty could only come with paying off large prepetition facilities and settling with agitated trade creditors (boith to prevent overseas proceedings and allow for normalized trade relationships to resume) with whom the Debtors had run up a considerable (and unpaid) bill.
From Ducera: "…given that the Company has worldwide operations with numerous affiliates organized under the laws of countries in every continent other than Antarctica, the Company determined it was not practicable to subject each of its affiliates to court proceedings. Instead, the Company determined that some combination of its United States and Canadian affiliates would file these Chapter 11 Cases and/or its affiliate Diebold Nixdorf Dutch Holding B.V. would file the Dutch Scheme Proceeding.
In order to achieve its restructuring objectives, the Company determined that it would require, among other things, access to new financing at the outset and during these in-court proceedings to, among other things: (a) fund the Company's (including the Debtors') business operations during the Chapter 11 Cases and Dutch Scheme Proceeding; (b) fund the costs of the parallel court proceedings; (c) pay off certain outstanding foreign obligations to mitigate against the risk that foreign creditors would take actions in foreign jurisdictions (including filing involuntary insolvency proceedings) that could disrupt these Chapter 11 Cases and the Dutch Scheme Proceeding; (d) obtain the release of all German funded debt guarantors (and the liens on German assets securing those guarantees); and (e) reduce the delinquent amounts owed to domestic trade creditors. The Company also determined that it would need access to exit financing to fund the Company's balance sheet restructuring."
With the Debtors' advisers highlighting the need for large amounts of financing…NOW…Judge Jones ultimately concluded: "It all makes sense to me….Standing alone, the expense of it would not make sense to me.”
On May 31, 2023, Diebold Holding Company, LLC and nine affiliated debtors (NYSE: DBD; together, “Diebold Nixdorf” or the “Debtors”) filed for Chapter 11 protection noting, estimated assets between $1.0bn and $10.0bn; and estimated liabilities between $1.0bn and $10.0bn ($2.7bn of funded debt; NB: the Debtors’ 10-Q for Q1 2023 noted assets of $3.091bn and liabilities of $4.563bn as at March 31, 2023). At filing, the Debtors* cited "declining sales growth" (resulting from proliferation of non-cash options); the disappointing 2016 acquisition of Wincor Nixdorf Gmbh; insufficient additional liquidity provided by their 2022 debt restructuring; and recent macro-economic headwinds (ie Covid, supply chain issues and inflation) as as precipitating ter need to seek bankruptcy shelter.
* Diebold Nixdorf is a leading global financial and retail technology company that specializes in the sale, manufacturing, installation and maintenance of self-service transaction systems (such as ATMs and currency processing systems), point of sale terminals, physical security products and software related to services provided to global financial, retail and commercial institutions. In short, the Company provides integrated solutions to automate and digitize banking and shopping processes, and it serves the banking and retail sectors in over 100 countries around the world.
Key Terms of DIP Financing
- Borrower: Diebold Nixdorf Holding Germany GmbH
- Agent: GLAS USA LLC the Administrative Agent, and GLAS Americas LLC the Collateral Agent.
- Commitment: $1.25bn term loan in two tranches. Tranche B-1 consists of a $760.0mn term loan and Tranche B-2 consists of a $490.0mn term loan that will be utilized to refinance the 2025 Superpriority Term Loan Facility. Both Tranche B-1 and Tranche B-2 will be fully funded to the Debtors upon the entry of the Interim Order, if the relief sought in this Motion is granted.
- New Money: Tranche B-1 provides the Debtors with $517.0mn of new money
- Roll-Up: (i) $243.0mn of Tranche B-1 proceeds to be utilized to refinance the 2026 ABL Facility and the FILO Facility Tranche and (ii) enirety of Tranche B-2 proceeds to be utilized to refinance the 2025 Superpriority Term Loan Facility.
- Interest Rates: The DIP Term Loans carry interest at a rate per annum equal to either (i) the Term SOFR Rate (subject to a floor of 4.00%), plus 7.50% or (ii) an Alternate Base Rate (subject to a floor of 5.00%), plus 6.50% and the default rate shall be the rate that is otherwise applicable thereto plus 2.00% and (ii) all other amounts under the DIP Facility that are overdue at a rate applicable to DIP Term Loans that bear interest at the Alternate Base Rate plus 2.00%;
- Backstop Premium: 13.5% of the New Common Stock (subject only to dilution on account of the New Management Incentive Plan);
- Upfront Premium: 6.5% of the New Common Stock (subject only to dilution on account of the New Management Incentive Plan);
- Additional Premium: 7.0% of the New Common Stock (subject only to dilution on account of the New Management Incentive Plan); and
- Participation Premium: payable on a pro rata basis based on the DIP Term Loans and DIP Term Commitments provided (or caused to be provided) by such DIP Lender, equal to, in the aggregate, 10.0% of the New Common Stock (subject only to dilution on account of the New Management Incentive Plan).
- Use of Proceeds: Subject to the Orders, the proceeds of the Term Loans will be used in accordance with, and as provided in, the Approved Budget (subject to permitted variances), including, without limitation: (i) in the case of the Tranche B-1 Term Loans, (a) to fund the ABL Facility Refinancing, (b) to pay costs, fees and expenses related to the Cases, including the Carve-Out, (c) to make adequate protection payments and (d) to fund the working capital needs and expenditures of the Debtors and their non-Debtor Affiliates during the Cases in accordance with the Approved Budget, including, for the avoidance of doubt, the claims of prepetition creditors, which may include, without limitation, employees, customers, lienholders, insurers, vendors and taxing authorities, in each case, to the extent authorized by the Interim Order or the Final Order (as applicable) and consistent with the Approved Budget and (ii) in the case of the Tranche B-2 Term Loans, to fund the Superpriority Term Loan Facility Refinancing; provided, that, subject to Section 6.15(v), proceeds of the Term Loans may be on-lent by the Company to certain of the Foreign Credit Parties pursuant to one or more intercompany loans among the Company, the Foreign Credit Parties party thereto and the other Subsidiaries party thereto (each, a “Downstream Intercompany Loan Agreement” and, collectively, the “Downstream Intercompany Loan Agreements”)
- Maturity Date: September 30, 2023
- Milestones:DIP Credit Agreement imposes certain milestones to, among other things:
- Deadline to obtain entry of the Interim Order; (two days after the Petition Date).
- Deadline to Commence the Dutch Scheme Proceeding; (five days after the Petition Date).
- Deadline to obtain entry of the Final Order; (forty-five days after the Petition Date).
- Deadline to obtain confirmation of the U.S. Plan; (forty-five days after the Petition Date).
- Deadline to obtain entry of the Dutch Sanction Order; (seventy-five days after the Petition Date).
- Deadline for Effectuate the U.S. Plan; (eighty days after the Petition Date).
The DIP Motion
The motion [Docket No. 13] provides, “The DIP Facility (as defined herein) is one of several linchpins of the successful reorganization of Debtor Diebold Nixdorf, Incorporated (‘Diebold’) and its debtor and non-debtor affiliates (the ‘Company’). The Company’s tightening liquidity during the first half of 2023 combined with its global footprint created a unique challenge: how to obtain desperately needed liquidity and restructure its global balance sheet, while mitigating the risks that creditors of the 29 European entities that are borrowers, issuers or guarantors of the Company’s debt (and which also have stretched trade payables on their books) could seek involuntary insolvency proceedings in their jurisdictions or that directors of these foreign entities may conclude that they should initiate such actions to avoid liability.
…the DIP Facility has a simple structure. It provides the Debtors with a $1.25 billion term loan in two tranches. Tranche B-1 consists of a $760 million term loan that will be utilized to refinance the 2026 ABL Facility and the FILO Facility while also providing $517 million of new liquidity to the Company. Tranche B-2 consists of a $490 million term loan that will be utilized to refinance the 2025 Superpriority Term Loan Facility. Both Tranche B-1 and Tranche B-2 will be fully funded to the Debtors upon the entry of the Interim Order, if the relief sought in this Motion is granted.
While the DIP Facility’s structure is simple, it also mitigates the risks associated with the Debtors’ European affiliates described above. First, the Company’s prepetition debt documents allow lenders under the 2025 Superpriority Term Loan Facility, the First Lien Debt and the Second Lien Debt (collectively, the ‘Prepetition Non-ABL Senior Debt’), to release all German guarantors of those facilities (and the liens on German assets securing those guarantees) thereunder in anticipation of and contingent upon the filing of a voluntary petition under chapter 11 of the Bankruptcy Code. In anticipation of these Chapter 11 Cases, the requisite lenders under the Prepetition Non-ABL Senior Debt agreed to release (or, in the case of the Second Lien Debt, were deemed to release) the Debtors’ non-debtor German affiliates’ (the ‘German Non-Debtors’) from their guarantees of the Prepetition Non-ABL Senior Debt and their assets from the collateral package securing the Prepetition Non-ABL Senior Debt (the ‘German Collateral’).
Second, 13 non-debtor foreign affiliates are borrowers under at least one of the Company’s three most senior tranches of secured prepetition indebtedness: the 2025 Superpriority Term Loan, the ABL Facility, and the FILO Facility. The Debtors’ replacement and refinancing of these prepetition facilities with the proceeds of the DIP Facility alleviates the risk to these foreign non-debtor affiliates’ officers and directors of personal liability and lessens the risk that material non-debtor affiliates would end up in piecemeal foreign insolvency proceedings that could significantly disrupt the reorganization of the Company.
Third, the DIP Facility provides $517 million of new money, which will be available to, among other things, pay the Debtors’ general unsecured claims in the ordinary course of business during the pendency of these Chapter 11 Cases. Importantly, the DIP Facility was sized so that significant funds will be made available immediately upon the Debtors’ ability to draw to reduce trade payables of the Debtors’ non-debtor foreign affiliates as well as domestic trade payables. As of the commencement of these Chapter 11 Cases, the Company was down to its last $3.7 million available cash in the United States; thus it requires immediate and substantial liquidity that will be provided by the DIP Facility to continue to maintain its operations and to preserve the going concern value of the businesses. Approval of the DIP Facility on an interim basis is essential to continue to fund the Debtors’ and the broader Company’s operations.
Additionally, the DIP Facility includes a conversion to an exit facility at the conclusion of these Cases – with no additional fees, costs or premiums payable by the Debtors – thus eliminating an additional hurdle standing between the Debtors and their successful exit from chapter 11.”
The Debtors' investment banker (Derron S. Slonecker of Ducera) adds on the need to refinance prepetition debt from the outset of these cases: "…given that the Company has worldwide operations with numerous affiliates organized under the laws of countries in every continent other than Antarctica, the Company determined it was not practicable to subject each of its affiliates to court proceedings. Instead, the Company determined that some combination of its United States and Canadian affiliates would file these Chapter 11 Cases and/or its affiliate Diebold Nixdorf Dutch Holding B.V. would file the Dutch Scheme Proceeding.
In order to achieve its restructuring objectives, the Company determined that it would require, among other things, access to new financing at the outset and during these in-court proceedings to, among other things: (a) fund the Company's (including the Debtors') business operations during the Chapter 11 Cases and Dutch Scheme Proceeding; (b) fund the costs of the parallel court proceedings; (c) pay off certain outstanding foreign obligations to mitigate against the risk that foreign creditors would take actions in foreign jurisdictions (including filing involuntary insolvency proceedings) that could disrupt these Chapter 11 Cases and the Dutch Scheme Proceeding; (d) obtain the release of all German funded debt guarantors (and the liens on German assets securing those guarantees); and (e) reduce the delinquent amounts owed to domestic trade creditors. The Company also determined that it would need access to exit financing to fund the Company's balance sheet restructuring.
As noted above, one of the Company's principal objectives for any DIP financing was to have sufficient liquidity to pay off certain outstanding obligations of foreign affiliates that will not be covered by the in-court proceedings. The Company is concerned that foreign creditors, to whom those obligations are owed, may take actions in foreign jurisdictions (including filing involuntary insolvency proceedings) that could disrupt these Chapter 11 Cases and the Dutch Scheme Proceeding. The Company is also concerned that directors of certain of the foreign entities would conclude that they must take such potentially disruptive actions to avoid liability (including filing voluntary insolvency proceedings). The outstanding foreign obligations are comprised primarily of trade debt of the Company's foreign affiliates, including in Germany, and the Company's various German foreign affiliates' obligations on certain prepetition funded debt. With respect to the first concern, I understand that a Dutch moratorium, if granted, will only stay creditors subject to the scheme (i.e., funded debt creditors) from taking actions against the Dutch Scheme Parties. Thus, it is likely that no foreign trade creditors will be stayed from taking actions against any of the nondebtor Company affiliates during the in-court proceedings.
With respect to the second concern, the Company's prepetition debt documents allow certain lenders to release all German funded debt guarantors (and the liens on German assets securing those guarantees) contingent upon the filing of insolvency proceedings. However, certain German affiliates are borrowers (and thus not subject to any German guarantee release in their capacities as borrowers) under the Company's three most senior tranches of secured prepetition indebtedness: the ABL Facility, the FILO Facility and the 2025 Superpriority Term Loan. Consequently, the Debtors specifically requested that the DIP Lenders agree to provide sufficient financing to allow the Company to refinance the ABL Facility, the FILO Facility and the 2025 Superpriority Term Loan, which are fully secured obligations, and bring the foreign trade debt obligations current.
These negotiations ultimately culminated in an agreement between the Company and the Ad Hoc Group regarding the terms and conditions of the RSA, a critical component of which is the DIP Facility that provides for $1.25 billion of committed capital to fund the Chapter 11 Cases and emergence therefrom through conversion to long-term exit financing. The DIP Facility achieves the Company's key objectives, including (a) fully-funding the Company's business plan and costs of the in-court processes; (b) providing a quantum of capital sufficient for the Company to refinance the ABL Facility, FILO Facility and the Superpriority Term Loan, as well as the release of the German guarantees (and related liens); (c) allowing for a significant pay down of prepetition trade balances to stabilize the Company's supply chain; (d) requiring no cash fees or adequate protection payments to preserve cash for the benefit of the estate; (e) requiring no direct credit support from the Debtors' Germany subsidiaries, ensuring the stability of the Company's European operations through these Chapter 11 Cases; and (f) providing for convertibility into an exit facility, thus eliminating the requirement for the Debtors to seek separate exit financing."
Slonecker continues: "Even though I, the Company and the Company's other advisors, believe that the Company's existing capital structure would prevent third parties' agreeing to provide financing on equal or better terms than the DIP Financing, Ducera conducted a marketing process to verify that belief. In May of 2023, Ducera, in coordination with the Company's other advisors, commenced a process to assess third parties' willingness to provide financing to the Company or the Debtors in connection with these Chapter 11 Cases. Ducera considered which parties to contact based on a number of factors, including, but not limited to: (x) institutions who could provide the entire amount of the postpetition financing in an expedited time frame, (y) institutions known to have interest in providing postpetition financing and (z) institutions known to be familiar with the Company.
Ducera contacted ten third parties. Based on the Company's prepetition capital structure, Ducera focused on trying to obtain postpetition financing that was either: (a) junior in right of payment to Prepetition Secured Parties or; (b) sufficiently large enough to refinance and upsize the Prepetition Secured Obligations. Ducera received no formal or informal proposal to provide postpetition financing. As a result of Ducera's marketing process and the discussions we had with the ten contacted third parties and/or their professionals, I determined that the Company would not be able to obtain any alternative proposals because alternative lender concerns about the quantum of DIP financing required, the loan-to-value of any proposed third-party postpetition financing and the potential litigation risk tied to priming efforts. During this time, Ducera also continued discussions with the ABL Lenders to explore their interest in modifying their prior proposal to provide the Debtors with a fully-funded alternative to the DIP Facility. In these discussions, the ABL Lenders did not indicate any subsequent interest in expanding upon their original quantum of financing offered in early May.
A final hearing on the motion is scheduled for June 12, 2023.
As of the Petition date, the Debtors had $2.7bn in outstanding funded debt obligations, including $2.631bn of secured obligations, as set forth in the following chart:
The following table depicts the Debtors’s prepetition capital structure, exclusive of accrued but unpaid interest and fees (and also exclusive of capitalized fees):
Petition Date Highlights
- Global Leader in the Manufacture of ATMs Files for Bankruptcy (on a "Prepackaged" Basis) with $2.7bn of Funded Debt
- Debtors Cite "Declining Sales Growth" (Resulting from Proliferation of Non-Cash Options); Disappointing 2016 Acquisition of Wincor Nixdorf Gmbh; Insufficient Additional Liquidity from 2022 Debt Restructuring; and Recent Macro-Economic Headwinds (ie Covid, Supply Chain Issues and Inflation) as Key Factors Leading to Bankruptcy
- Holders of First Lien Claims to get 98% of Emerged Equity, Holders of Second Lien Claims to Share 2%
- Holders of 2024 Unsecured Notes in Line for Estimated 2% Cash Recovery
- RSA-Backed Lender Support Includes 80.4% Superpriority Credit Facility; 79% of First Lien Term Loan; 78% of First Lien Notes; and 58.3% of Second Lien Notes
- Debtors Line Up $1.25bn DIP Financing Facility Which Converts to Exit Facility
In a press release announcing the filing, Diebold Nixdorf noted that it had: “….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 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.
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.
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."
The Debtors' CEO Octavio Marquez commented: "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."
Goals of the Chapter 11 Filing
"To implement a comprehensive financial restructuring of their funded debt, the U.S. Debtors will commence chapter 11 cases…in the Bankruptcy Court seeking Confirmation of the U.S. Plan, and the Netherlands Debtor will institute proceedings in the Dutch Court seeking sanctioning of the WHOA Plan."
Events Leading to the Chapter 11 Filing
The Disclosure Statement provides a rather anodyne mea culpa as to the Debtors' need to seek bankruptcy shelter beginning its narration with the Debtors' disappointing 2016 Wincor Neixdorf Gmbh acquisition, and the ensuing $500.0mn cash burn as anticipated merger benefits failed to materialize against a backdrop of higher "non-routine" expenses, … followed by the standard string of macro-economic headwinds (COVID, supply chain disruptions and inflation)…and the concession that they simpy got the numbers wrong in their recent 2022 restructuring, ie that the "2022 Debt Restructuring ultimately provided insufficient liquidity for the Company’s working capital needs."
Buried, however, in the description of the lackluster Wincor Neixdorf acquisition is a reference to what may be the most critical point here, that from 2016 "the Company faced flat or declining sales growth and gross margins," although the Debtors fail to drill down on that admission in their bankruptcy filings.
One has to dig (really) deep into the risk factors in the Debtors' 2022 10-K to get insight on that "declining sales growth." From the 10-K: "The proliferation of payment options other than cash, including credit cards, debit cards, store-valued cards and mobile payment options could result in a reduced need for cash in the marketplace and a resulting decline in the usage of ATMs. The U.S., Europe and other developed markets have seen a shift in consumer payment trends since the late 1990's, with more customers now opting for electronic forms of payment, such as credit cards and debit cards, for their in-store purchases over traditional paper-based forms of payment, such as cash and checks. The recent COVID-19 pandemic has accelerated consumer transition towards non-cash payment alternatives driving an increase in digital, mobile and contactless payment methods. Additionally, some merchants offer free cash back at the POS for customers that utilize debit cards for their purchases, thus providing an additional incentive for consumers to use these cards. The continued growth in electronic payment methods could result in a reduced need for cash in the marketplace and ultimately, a decline in the usage of ATMs. New payment technology and adoption of mobile payment technology, digital currencies such as Bitcoin, or other new payment method preferences by consumers could further reduce the general population's need or demand for cash and negatively impact sales of ATMs and selected products, services and software."
This is exactly the "hardware squeeze" what the American Banker is talking about when it notes (in discussing the Debtors' predicament) that an "unrelenting retreat from static points of contact in the payments and financial services industries is pushing at least one traditional terminal maker to a breaking point."
From the Disclosure Statement: "After the 2016 Acquisition, whereby the Company acquired Wincor Nixdorf Gmbh, the Company faced flat or declining sales growth and gross margins while supporting a significantly higher debt burden. At the same time, the Company incurred large non-routine expenses, attributable to post-merger capital investment and restructuring costs, which contributed to a cash burn of more than $500 million since 2018, stressing the Company’s liquidity. The Company posted its best adjusted gross profit margin since the 2016 Acquisition in the third quarter of 2019, largely as a result of the certain cost-cutting measures.
The Company continued to face liquidity headwinds leading up to and throughout 2022. Changes in operations and sales due to COVID-19, supply chain disruptions and rising inflation raised manufacturing costs, further reducing net income and contributing to an order backlog that grew to $1.3 billion by the end of 2022. In March 2022, the Company entered into a covenant relief amendment that modified the total net leverage ratio covenant in the credit agreement governing its then-extant revolving credit facility and term loan B facility, providing limited financial flexibility. In May 2022, S&P downgraded the Company to a credit rating of CCC+ due to what it identified as an unsustainable capital structure. At the time, the Company’s outstanding revolver balance of $136 million and outstanding first-lien term loan of $755 million were scheduled to mature in 2023, with an additional $400 million of unsecured notes scheduled to mature in 2024. The liquidity situation and impending maturities led the Company to engage with its lenders to try to extend maturities and augment liquidity.
As a result of months of negotiations, in October 2022, the Company announced a transaction support agreement (the 'TSA') for a debt restructuring (the '2022 Debt Restructuring') to refinance a portion of the Company’s then-existing debt structure and provide for an additional new-money facility. The 2022 Debt Restructuring was consummated on December 29, 2022 (the 'Settlement Date'). As part of the 2022 Debt Restructuring, the Company entered into a new, $250 million asset-based ABL Facility, which replaced the Company’s prior revolving facility. Non-debtor Diebold Nixdorf Holding Germany GmbH ('German Borrower') also became the borrower under a new $400 million Superpriority Term Loan, with lenders party to the TSA with respect to the 2022 Debt Restructuring serving as lenders under the Superpriority Term Loan.
The Company also entered into a twelfth amendment (the 'Twelfth Amendment') to the credit agreement, dated as of November 23, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the 'Existing Credit Agreement'). The Twelfth Amendment, among other things: (a) permitted the Exchange Offers and Consent Solicitations (as defined below), the Term Loan Exchange (as defined below) and the entry into the Superpriority Facility…, the ABL Facility and certain other related transactions (together, the 'Refinancing Transactions'); (b) removed substantially all negative covenants and mandatory prepayment provisions from the Existing Credit Agreement; and (c) directed the collateral agent under the Existing Credit Agreement to release the liens on certain current-asset collateral securing the ABL Facility on a first-priority basis (the 'ABL Priority Collateral') and certain other collateral securing the Company’s obligations under the Existing Credit Agreement and the Company’s existing subsidiary guarantors’ obligations under the related guarantees (in each case, to the extent permitted, including under applicable law).
The 2022 Debt Restructuring ultimately provided insufficient liquidity for the Company’s working capital needs, and…on March 21, 2023, the Company entered into the FILO Amendment to provide the Company with $55 million in additional liquidity as the Company and its lenders negotiated a long-term solution that would allow the Company to continue to operate and satisfy its obligations to its customers, suppliers and employees.
About the Debtors
According to the Debtors: “Diebold Nixdorf, Incorporated (NYSE: DBD) automates, digitizes and transforms the way people bank and shop. As a partner to the majority of the world's top 100 financial institutions and top 25 global retailers, our integrated solutions connect digital and physical channels conveniently, securely and efficiently for millions of consumers each day. The company has a presence in more than 100 countries with approximately 21,000 employees worldwide.“
The Disclosure Statement adds: "The Company, which was founded in 1859 in Cincinnati, Ohio, is a leading global financial and retail technology company that specializes in the sale, manufacturing, installation and maintenance of self-service transaction systems (such as ATMs and currency processing systems), point of sale terminals, physical security products and software related to services provided to global financial, retail and commercial institutions. In short, the Company provides integrated solutions to automate and digitize banking and shopping processes, and it serves the banking and retail sectors in over 100 countries around the world.
The Company currently employs approximately 21,000 workers and has a global real estate footprint of approximately 1.5 million square feet composed of manufacturing facilities, customer service centers and corporate offices. The Company’s organizational footprint is vast and consists of more than 140 entities in jurisdictions throughout North and South America, the United Kingdom, the European Union and other locations throughout Asia and the Middle East. As a result of the 2016 Acquisition, the Company’s global operations are coordinated by corporate teams in both Hudson, Ohio and Paderborn, Germany. Chairman of the Board, President and CEO Octavio Marquez, Chief Financial Officer James Barna, Chief Legal Officer and Secretary Jonathan Leiken, and Chief People Officer Lisa Radigan sit in Hudson. Chief Operating Officer Olaf Heyden sits in Paderborn. Executive Vice President, Global Banking Joe Myers and Executive Vice President, Global Retail Ilhami Cantadurucu work remotely."
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