Rockley Photonics receives confirmation of plan of reorganization

By Sarah Lizee

Olympia, Wash., March 13 – Rockley Photonics Holdings Ltd. received confirmation of its amended Chapter 11 plan of reorganization and final approval of its disclosure statement on Friday, according to an order filed with the U.S. Bankruptcy Court for the Southern District of New York.

The plan was recently amended to modify language relating to the plan’s releases. The U.S. trustee overseeing the case had filed an objection to the plan based on the releases.

As previously reported, the debtor and prepetition noteholders agreed on the terms of the plan. The company said it had received overwhelming support for the restructuring by major stakeholders, including 100% of the prepetition noteholders.

The plan provides for a comprehensive recapitalization of the prepetition notes claims, anchored by the prepetition noteholders’ commitment to equitize their outstanding debt and fund about $35 million of new money to the debtor on the effective date, which will substantially deleverage the debtor’s capital structure, increase liquidity, and is designed to ensure the future viability of the company.

The prepetition noteholders’ commitment is divided between $20.9 million in exit financing – including the conversion of $5.08 million of allowed super senior notes claims into the exit financing – and a prepetition noteholder private placement for the purchase of $20 million of reorganized Rockley equity to increase the debtor’s liquidity.

Specifically, each holder of an allowed super senior notes claim will receive its pro rata share and interest in a distribution of reorganized equity, subject to dilution, which will constitute 75.82% of reorganized equity; the right to purchase its pro rata share of $15.87 million of the exit financing; its pro rata share of $5.08 million of the exit financing; and the right to participate in the prepetition noteholder private placement to acquire its pro rata share of up to 75.82% of $20 million of reorganized equity at a 20% discount to agreed equity value.

Each holder of an allowed existing notes claim will receive its pro rata share and interest in a distribution of reorganized equity, subject to dilution, which will constitute 24.18% of reorganized equity; and the right to participate in the prepetition noteholder private placement to acquire its pro rata share of up to 24.18% of $20 million of reorganized equity at a 20% discount to agreed equity value.

Each holder of an allowed general unsecured claim will receive payment in cash plus post-petition interest, reinstatement of their claims, or other treatment leaving the claims unimpaired.

Each holder of an allowed intercompany claim will, at the debtor’s election with the consent of the prepetition noteholders, have its claim reinstated, converted to equity, or extinguished, compromised, addressed, setoff, canceled, or settled, potentially without any distribution on account of the claims.

Each holder of an allowed interest in the debtor will have its interest canceled and extinguished as of the effective date and will not receive any distribution on account of such interest.

Each holder of an allowed 510(b) claim will have its claim discharged and extinguished and will not receive or retain any property under the plan on account of such section 510(b) claim.

Only holders of super senior notes claims and existing notes claims were entitled to vote on the plan. The deadline to vote was 4 p.m. ET on Jan. 23.

Cheshire, U.K.-based Rockley Photonics specializes in the research and development of integrated silicon photonics chipsets. The company filed bankruptcy on Jan. 23 under Chapter 11 case number 23-10081.

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