Diebold Nixdorf signs transaction support agreement with stakeholders

Chicago, Oct. 20 – Diebold Nixdorf, Inc. announced entry into a comprehensive transaction support agreement with key financial stakeholders that will refinance certain debt with near-term maturities and provide the company with $400 million of new capital, according to an 8-K filing with the Securities and Exchange Commission.

The transactions contemplated in the agreement are expected to be consummated by Dec. 31.

Agreement

The key financial stakeholders who are party to the agreement include holders of over a majority of the company’s term loans (78.8% of term loan holders) and each series of the company’s outstanding secured (noteholders representing a combined 89.7% of the 9 3/8% and 9% secured notes due 2025) and the unsecured notes (noteholders representing 59.3% of the 8˝% notes due 2024). The notes due 2025 include the 9 3/8% dollar-denominated notes and the 9% notes due 2025 issued by Diebold Nixdorf Dutch Holding BV. Noteholders representing 91.8% of the dollar notes have signed with noteholders representing 85.4% of the euro senior notes.

The stakeholders have agreed to provide financing for $400 million.

Stakeholders who have not yet signed may still sign a joinder by Oct. 27 and will have the opportunity to elect to provide commitments for the additional financing, replacing certain of the existing commitments from stakeholders who have already signed.

Parties who execute a joinder by that date will be eligible to receive certain transaction premiums that are described in the support agreement.

Loans

Under the agreement, the company will obtain a $250 million asset-based credit facility that will mature in July 2026, subject to a springing maturity date that is 91 days before the maturity of certain debt of the company or its subsidiaries above a certain threshold. The credit facility will replace the company’s existing revolver.

Additionally, Diebold Nixdorf Holding Germany GmbH will obtain a new $400 million super-senior term loan that will mature in July 2025. The loan is already committed in full from signers of the support agreement. A portion of the proceeds of the new super senior facility will be applied on the closing date to prepay 15% of the existing term loans that elect to exchange into extended term loans (see next paragraph).

Holders of existing term loans will be offered to exchange their existing term loans into extended term loans that will mature in July 2025. In addition to the 15% prepayment mentioned above, the company will need to prepay another 5% on Dec. 31, 2023, subject to satisfaction of a specified minimum liquidity threshold. Should the minimum liquidity threshold not be met, the company would need to prepay the 5% on Dec. 31, 2024. Exchanging term loan holders will receive a 3% transaction premium paid in kind, in the form of extended term loans, for exchanging their loans.

Lenders will also be asked to consent to amend the existing credit agreement to permit the transaction, remove substantially all negative covenants and mandatory prepayments and to direct the administrative agent to release all liens on certain collateral securing the company’s and existing subsidiary guarantors’ obligations under the existing credit agreement.

2024 notes

Holders of 2024 senior notes will be offered the opportunity exchange their notes into new notes due October 2026. Noteholders will receive $950 of new notes for existing notes, plus penny warrants exercisable for common shares in the company, representing 19.99% of the outstanding common shares of the company. The warrants will be non-detachable and will be exercisable starting April 2024.

Noteholders of notes due 2024 will also be asked to consent to amend the senior notes indenture to allow the transaction, remove substantially all negative covenants and mandatory prepayments and to extend the grace period under the indenture with respect to defaults until the maturity of the notes. Holders who have signed the agreement by the joinder date will receive a transaction premium of 5% of the principal amount of their senior notes, paid in kind as new senior notes.

2025 notes

Holders of notes due 2025 will be asked to consent to allow the transaction and provide the 2025 senior notes with certain covenant, collateral and guarantee enhancements. Signers by the joinder date will receive a transaction premium of 3%, paid in kind in the form of 2025 senior notes.

Details

If the transaction does not occur before Dec. 20, an in-kind ticking fee in the form of additional loans will be paid at a rate of the margin on SOFR loans under the super senior facility.

The transaction needs to close by Dec. 31, or it will terminate.

The support agreement contemplates a structuring premium payable by the company to certain initial consenting holders, in cash, at 4% of the value of the outstanding common shares based on the volume weighted average price of the company’s common shares calculated over the 30-day period starting the day before the transaction support agreement was signed.

The structuring premium will be used by the recipients to purchase common shares of the company. The structuring premium is subject to a $12 million cap.

Diebold Nixdorf is a Hudson, Ohio-based financial and retail technology company.

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