- Agreement in principle on terms for $28 million in equity
financing, with an initial tranche of $20 million expected to be
funded in December 2023, subject to definitive agreements being
entered into
- Agreement in principle on terms for up to $40 million of
optional equity financing, subject to definitive
agreements
- Agreement in principle on terms for restructuring of its
$147.5 million 6.00% convertible senior notes due 2026 to reduce
indebtedness, extend maturity and PIK interest
Selina Hospitality PLC ("Selina" or the “Company”), (NASDAQ:
SLNA), a leading lifestyle and experiential hospitality company
catering to millennial and Gen Z travelers, today provides a
business update regarding fundraising and liability management
efforts, particularly relating to the Company’s $147.5 million
principal amount of 6.00% convertible senior notes due 2026 (the
“2026 Notes”), as announced via a Report on Form 6-K filed with the
U.S. Securities and Exchange Commission on December 1, 2023 (the
“6-K”).
Potential Financing of Up to $68
Million
Selina has agreed in principle to commercial terms for strategic
investments totaling up to $68 million, led by Osprey Investments
Limited ("Osprey"), an affiliate of Global University Systems B.V.,
a leading global higher education platform, together with other
potential investors. Osprey previously invested $15.6 million via
convertible secured promissory notes entered into in June and July
2023, respectively (the “Initial Osprey Notes”). The new investment
remains subject to finalization and execution of definitive
agreements and is contingent on the successful completion of a
restructuring (the “Note Restructuring”) of at least 80% of the
$147.5 million principal amount of 6.00% Convertible Senior Notes
due 2026 (the “2026 Notes”), and if completed, will form part of
the Company’s plan to strengthen its balance sheet as it continues
on its path to achieving profitability and cash flow positive
operations. The investments are anticipated to be completed in
multiple tranches as follows:
- The first tranche would comprise an immediate $20.0 million
investment by Osprey in exchange for ordinary shares in the
Company;
- An additional $8.0 million investment would be payable over a
period ending 12 months from closing, subject to further
shareholder approval for the issuance of ordinary shares required
for elements of the transaction;
- As part of the funding arrangements, approximately $8.7 million
of indebtedness held by (or to be assumed by) Osprey, including
$4.7 million of 2026 Notes and $4.0 million of the Initial Osprey
Notes, would be converted into equity and Selina would be required
to invest $4.0 million into FutureLearn, a British digital
education platform that provides online courses, microcredentials
and other degrees, which is owned by GUS; and
- The arrangements also provide for an optional third tranche of
funding that includes up to $20.0 million from GUS within a period
of 12 months from closing, with the holders of the 2026 Notes that
participate in the Note Restructuring having a right to
participate, and up to an additional $20.0 million from certain
other parties, which additional investment is anticipated to occur
within 30 days after the closing of the transaction.
Liability Management
Update
As of the date hereof, holders of 80.5% of 2026 Notes,
representing $118.8 million in principal, and Osprey have agreed in
principle to the terms of the Note Restructuring, subject to
finalization and execution of definitive documentation. In the Note
Restructuring, the Company would purchase the 2026 Notes held by
each of the participating holders for ordinary shares of the
Company, warrants to acquire ordinary shares of the Company and new
senior secured notes that do not contain a conversion feature and
have certain other modified terms (the “New Notes”). The New Notes
would have a principal amount equivalent to 60% of the principal
amount of the participating 2026 Notes, have a maturity date of
November 1, 2029, and bear interest at a rate of 6% per annum,
which interest will accrue and be payable in kind through maturity
and will be secured, in part, by a security interest in the Selina
brand that will be shared with a security interest in that
collateral held by Osprey in connection with the Initial Osprey
Notes.
If completed, this transaction would help ensure a transition to
a more durable balance sheet and robust capital structure and
provide the Company with liquidity to support its path to
profitability.
The transactions would involve the following additional
conditions and key terms:
- Osprey would have the right to appoint a total of four
directors to the Board of Directors of the Company and designate a
certain number of members of the Board committees, subject to the
Company’s continued compliance with the Nasdaq governance
requirements so long as the Company remains a listed company, while
two members of the Board could remain as executive directors.
- The participating noteholders would have the right to appoint
one director to the Company’s Board of Directors, subject to the
approval of Osprey, not to be unreasonably withheld.
- The parties would agree to support, and, as applicable, vote in
favour of the delisting of the ordinary shares of the Company from
the Nasdaq Global Market (“Nasdaq”) and the deregistration as an
SEC-reporting company subject to applicable conditions, with the
timing of such take-private transaction to be determined.
The terms remain subject to finalization of the definitive
documentation for the transactions. The parties intend to finalize
and enter into all agreements required for the Note Restructuring
and new investment from Osprey as soon as practicable after the
date hereof and will provide further updates as required. The other
primary terms of the proposed transactions and their proposed
impact on the capital structure of the Company, including a
potential change of control of the Company, are explained further
in the 6-K.
There can be no assurances that the transactions will be
successfully completed or that the Company will have sufficient
liquidity to complete the transactions.
About Selina Hospitality PLC
Selina (NASDAQ: SLNA) is one of the world’s largest hospitality
brands built to address the needs of millennial and Gen Z
travelers, blending beautifully designed accommodation with
coworking, recreation, wellness, and local experiences. Founded in
2014 and custom-built for today’s nomadic traveler, Selina provides
guests with a global infrastructure to seamlessly travel and work
abroad. Each Selina property is designed in partnership with local
artists, creators, and tastemakers, breathing new life into
existing buildings in interesting locations in 24 countries on six
continents – from urban cities to remote beaches and jungles. To
learn more, visit Selina.com or follow Selina on Twitter,
Instagram, Facebook, Linkedin or YouTube.
About Global University Systems
Global University Systems (GUS) is a powerhouse in the global
education sector, boasting a diversified portfolio of institutions
across 12 countries, including the UK, Germany, Canada, Ireland,
India, Israel, and Singapore. Dedicated to providing quality
education, fostering innovation, and promoting international
collaboration, GUS offers an array of flexible study options that
accommodate the unique personal and professional commitments of its
students. These options include online and blended learning through
the FutureLearn platform, Europe’s largest online education
platform with a community of over 18 million students and alumni
worldwide. GUS itself is home to a vibrant and diverse community of
over 100,000 active degree students from 150 nationalities on
average per year. Through its various educational initiatives, GUS
impacts millions of lives each year, and with its extensive
networks, the potential reach is even greater. Their strategic
investment in Selina underscores GUS's commitment to broadening its
influence, fostering environments that seamlessly blend education
and travel, and enriching the lives of a globally dispersed
community of learners and travelers. To learn more, visit
GlobalUniversitySystems.com.
Forward-Looking Information
This Report on Form 6-K includes “forward-looking statements”
within the meaning of the “safe harbor” provisions of the United
States Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally relate to future events, and
include terms such as “may,” “should,” “expect,” “intend,” “will,”
“estimate,” “anticipate,” “believe,” “predict,” “potential,” or
“continue,” or the negatives of these terms or variations of them
or similar terminology. In particular, statements in this Report
regarding our beliefs pertaining to our ability to obtain
additional funding, restructure liabilities and/or pursue other
strategic alternatives. Such forward-looking statements are subject
to risks, uncertainties (some of which are beyond our control), and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward-looking statements.
These forward-looking statements are based upon assumptions that,
while we consider reasonable, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, without limitation: potential negative
impacts on our financial results as a result of changes in travel,
hospitality, and real estate markets, including the possibility
that travel demand and pricing do not recover to the extent
anticipated, particularly in the current geopolitical and
macroeconomic environment; volatility in the capital markets; our
ability to execute on our plans to increase occupancy and margins;
the potential inability to meet our obligations under our
commercial arrangements and debt instruments; delays in or
cancellations of our efforts to develop, redevelop, convert or
renovate the properties that we own or lease; challenges to the
legal rights to use certain of our leased hotels; risks associates
with operating a significant portion of our business outside of the
United States; risks that information technology system failures,
delays in the operation of our information technology systems, or
system enhancement failures could reduce our revenues; changes in
applicable laws or regulations, including legal, tax or regulatory
developments, and the impact of any litigation or other legal or
regulatory proceedings; possible delays in ESG and sustainability
initiatives; the possibility that we may be adversely affected by
other economic, business and/or competitive factors, including
risks related to the impact of a world health crisis; and other
risks and uncertainties described under the heading “Risk Factors”
contained in the Annual Report on Form 20-F for the fiscal year
ended December 31, 2022 and subsequent filings with the Securities
and Exchange Commission. In addition, there may be additional risks
that Selina does not presently know, or that Selina currently
believes are immaterial, which also could cause actual results to
differ from those contained in the forward-looking statements.
Nothing in this Report should be regarded as a representation by
any person that the forward-looking statements set forth herein
will be achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements, which speak only as
of the date they are made. Except as may be required by law, we do
not undertake any duty to update these forward-looking
statements.
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Media: press@selina.com Investor: investors@selina.com
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