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CEVA Group Plc Announces Final Results and Expected Successful Completion of Private Exchange Offers, Recapitalization of its Balance Sheet and New Capital Raise

Transaction Strengthens Balance Sheet by Eliminating Approximately €1.3 Billion of Consolidated Net Debt Reduces Annual Cash Interest Costs by over €130 Million; Approx 50% Provides Over €230 Million of New Capital Infusion for Investment in the Company’s Business Plan CEVA Group Plc (“CEVA” or the “Company”), one of the world’s leading non-asset based supply chain … Continued

  • Transaction Strengthens Balance Sheet by Eliminating Approximately €1.3 Billion of Consolidated Net Debt
  • Reduces Annual Cash Interest Costs by over €130 Million; Approx 50%
  • Provides Over €230 Million of New Capital Infusion for Investment in the Company’s Business Plan

CEVA Group Plc (“CEVA” or the “Company”), one of the world’s leading non-asset based supply chain management companies, announced today the final results and expected successful completion of the previously announced private exchange offers (the “Exchange Offers”) and consent solicitations (the “Consent Solicitations”) for CEVA’s debt securities made pursuant to a Confidential Offering Memorandum, Consent Solicitation and Disclosure Statement dated 3 April 2013 (the “Offering Memorandum”). The Exchange Offers expired at 5:00 p.m., New York City time, on Wednesday, 1 May, 2013.  CEVA expects that the closing of the Exchange Offers will occur on 2 May 2013.

The Exchange Offers and the Consent Solicitations were conducted in connection with CEVA’s previously announced financial recapitalization plan to reduce substantially CEVA’s overall debt and interest costs, as well as increase liquidity and strengthen its capital structure (the “Recapitalization”).  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. Through the Recapitalization, the Company has reduced its consolidated net debt by approximately €1.3 billion, reduced its cash interest expense by over €130 million and the Company has received cumulative new capital commitments of over €230 million for investment in its business plan.

“We are pleased to be successfully completing the Recapitalization and are appreciative of the support of our creditors in this effort. CEVA is now a much stronger competitor in the Supply Chain Industry and we look forward to growing with our customers around the world,” said Marvin O. Schlanger, CEVA’s Chief Executive Officer adding that “this is a transformational transaction that positions CEVA to better serve our customers and develop new supply chain solutions and services to meet their needs”.

As of 5:00 p.m.,  New York City time, on Wednesday, 1 May 2013, valid tenders had been received from (i) approximately $688.9 million in aggregate principal amount of CEVA’s 11.5% Junior Priority Secured Notes due 2018 (the “Second Lien Notes”), (ii) approximately $577.1 million in aggregate principal amount of CEVA’s 12.75% Senior Notes due 2020 (the “Senior Unsecured Notes”), (iii) approximately $113 million in aggregate principal amount of CEVA’s Senior Unsecured Bridge Loans (the “Bridge Loans”) and (iv) approximately €5.9 million in aggregate principal amount of CEVA’s 12% Second-Priority Senior Secured Notes due 2014 (the “Unexchanged Notes” and, together with the Senior Unsecured Notes and the Bridge Loans, the “Senior Unsecured Debt”). Accordingly, eligible holders of approximately 96% of the aggregate principal amount of the Second Lien Notes and Senior Unsecured Debt agreed to the terms of the Exchange Offers and exchanged their debt of CEVA for new preferred and common equity interests of Ceva Holdings LLC (“Holdings”), which is now the parent company of CEVA.

In addition, as part of the successful completion of the Recapitalization, Holdings received approximately $191 million of gross cash proceeds from the completion of the previously announced Rights Offering and an additional $28 million through other  private placements of new series A-1 convertible preferred equity interests of Holdings. A portion of the backstop commitment was funded through a mandatorily convertible loan made to an unaffiliated party in order to facilitate the closing of the Exchange Offers in a timely manner.  In addition to this immediate cash infusion, CEVA, at its option, has access to additional liquidity up to the U.S. dollar equivalent of €65 million through the financing commitment made by one of the Company’s largest institutional investors.

All of the conditions to the Exchange Offers for CEVA’s debt have been satisfied or waived by the Company and Holdings. As previously announced, all eligible holders of Second Lien Notes and Senior Unsecured Debt that validly tendered such debt prior to the expiration time received the consent fee/early tender fee and the exchange consideration and the supplemental indentures relating to the Second Lien Notes and the Senior Unsecured Notes consent solicitations have become operative.

Separately, Holdings announced today that the expiration time and withdrawal deadline in respect of the previously announced private exchange offer by Holdings (the “CIL Exchange Offer”) under the Offering Memorandum for certain debt instruments (the “CIL PIK Instruments”) of CIL Limited (formerly CEVA Investments Limited “CIL”), has been extended to midnight, New York City time, on Thursday, 16 May 2013 (as the same may be extended, as it relates to the CIL Exchange Offer only, the “Expiration Time”). Holdings also announced that the CIL Exchange Offer is being amended to (1) delete the condition that holders of 100% of the CIL PIK Instruments participate in the CIL Exchange Offer and (2) modify the consideration being offered to holders of CIL PIK Instruments so that holders who validly tender (and do not withdraw) their CIL PIK Instruments will receive their pro rata share of the aggregate CIL PIK Instruments Exchange Consideration (as defined in the Offering Memorandum) as if 100% of the holders of CIL PIK Instruments had participated in the CIL Exchange Offer (instead of their pro rata share based on the actual amount of CIL PIK Instruments tendered). Except as set forth above, all other terms of the CIL Exchange Offer remain the same.  As of 5:00 p.m, New York City time on 1 May 2013, no CIL PIK Instruments had been tendered in the CIL Exchange Offer.

The new securities offered in the Exchange Offers have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.

The Exchange Offers are being made in the United States only to holders of securities who are both “qualified institutional buyers” or institutional “accredited investors” and “U.S. persons” and outside the United States only to persons other than “U.S. persons” who are “non-U.S. qualified offerees” (in each case, as such terms are used in the letter of eligibility).  The Exchange Offers are being made only by, and pursuant to, the terms set forth in the Offering Memorandum.

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