Lumileds Files Chapter 11, Plans to Reduce Debt by $1.3 Billion

LDS Lumileds logo 400

October 11, 2022

San Jose, Calif.-based Lumileds Holding B.V., a leader in innovative lighting solutions, has entered into a restructuring support agreement (RSA) with its lenders holding a significant majority of the loans outstanding under its prepetition first lien debt facility on the terms of a comprehensive financial restructuring that would significantly de-leverage and strengthen its balance sheet by over $1.3 billion. One goal of this action is to accelerate Lumileds’ growth and enable further investment in innovation to pursue additional strategic opportunities through the injection of up to $275 million of liquidity.

To efficiently implement the de-leveraging, a narrowly focused prepackaged Chapter 11 involving only Lumileds’ U.S. and Dutch entities has begun in the U.S. Bankruptcy Court for the Southern District of New York. Lumileds’ European, Asian, and other foreign subsidiaries and affiliates are not included in the filing and are unaffected by the Chapter 11 process. Lumileds has obtained the necessary support from its lenders to confirm the plan prior to commencing its proceedings and expects to emerge from Chapter 11 within approximately 60 days.

“Over the past few years, we have been hard at work transforming our cost structure and innovation pipeline, which has allowed us to capitalize more effectively on future market trends as a leader in the lighting industry,” said Matt Roney, CEO of Lumileds. “We have proactively taken steps to de-leverage our balance sheet given the ongoing challenges presented by global supply constraints, COVID-related issues, and the crisis in Ukraine. This recapitalization will enable us to further accelerate our efforts as a market-leading innovator within the specialty lighting industry. We believe that the most effective and efficient way to accomplish this is through a prepackaged Chapter 11 process that will be accompanied by a significant increase in our liquidity position. We appreciate the support of our lenders, who recognize the long-term value and enhanced potential Lumileds will create with a strengthened balance sheet.”

Lumileds has filed “first day” motions to obtain the requisite court authority to continue operating its businesses and facilities in the ordinary course without disruption to its customers, vendors, suppliers, or employees. As a result, the company has sought court approval to continue to pay all valid amounts owed to vendors and suppliers as they come due. In addition, Lumileds expects that employees will continue to receive their usual wages and benefits without interruption.

“Our number one priority is to deliver never before possible solutions for lighting, safety, and well-being,” Roney stated. “This comprehensive liquidity and de-leveraging solution will enable us to be an even more attractive and stronger partner as we continue to drive innovation in LED technology and offer new products and solutions to our customers. I would like to thank all of our valued employees, customers, vendors, suppliers, and sponsors for their ongoing support.”

Under the terms of the RSA, the existing secured lenders are expected to commit to support a transaction that will reduce the company’s funded debt by approximately $1.3 billion, from approximately $1.7 billion to $400 million comprised of takeback debt and post-petition loans, which will be combined into a 5-year exit facility.

The RSA also contemplates a commitment from certain of its lenders of up to $275 million in debtor-in-possession (DIP) financing, available as part of the Chapter 11 process. Subject to the Court’s approval, the DIP financing, together with the company’s available cash reserves and cash provided by operations, is expected to provide sufficient liquidity for Lumileds to continue meeting its ongoing obligations, including all obligations to customers, vendors, and suppliers, as well as employee wages, salaries, and benefits programs.

More information about Lumileds’ restructuring, including access to Court documents, can be found here.

Evercore is acting as investment banker for the Company; Paul, Weiss, Rifkind, Wharton & Garrison, LLP, and Latham & Watkins LLP are acting as corporate and restructuring counsel to Lumileds, and AlixPartners, LLP, as financial advisor. PJT Partners is acting as financial advisor for an ad hoc group of Lumileds’ lenders, and Gibson, Dunn & Crutcher LLP is acting as the group’s legal counsel.

Source

Related Articles


Changing Scene

  • TALQ Consortium Released Version 2.6.0 of the Smart City Protocol

    May 24, 2024 The TALQ Consortium has released a new version 2.6.0 of its Smart City Protocol, a global interface standard for smart city device networks. Continuous evolution of the protocol ensures the interface standard constantly adapts to changing market needs. Version 2.6.0 introduces a new Cabinet Control profile, an extension of active periods and… Read More…

  • Maxlite Appoints Lance Hollner as President & Chief Executive Officer

    May 24, 2024 MaxLite is pleased to announce that its Board of Advisors has appointed Lance Hollner as its new President & CEO. A lighting industry veteran, Hollner brings over two decades of lighting expertise and knowledge to MaxLite, along with a strong track record of delivering results, driving continuous improvement, and developing talent. Much… Read More…


Design

  • G5 Series from Eralux Illuminates the Oshawa Library

    G5 Series from Eralux Illuminates the Oshawa Library

    May 23, 2024 Eralux is proud to present its latest project with the G5 Series at the Oshawa Library to improve the atmosphere and use of public spaces. Located in downtown Oshawa, Ontario, the library is a center for learning and creativity. Now that Eralux’s innovative lighting solution has been introduced, the library experience is… Read More…

  • Luminis Wins Red Dot Award for Inline

    Luminis Wins Red Dot Award for Inline

    May 14, 2024 Luminis recently announced its Inline family has received a Red Dot Design Award for Product Design. Dating back to 1955, the Red Dot Design Award is one of the world’s largest design competitions. The Red Dot Label has become established internationally as one of the most sought-after marks of quality for good… Read More…


New Products

  • Discover Evoq Cove Lighting System from Lumenwerx

    Discover Evoq Cove Lighting System from Lumenwerx

    May 23, 2024 Lumenwerx proudly introduces Evoq, an adaptable cove lighting system comprising modular light fixtures in a plug-and-play design, several mounting options, and precision-engineered optics, among other components and features. Designed with meticulous attention to detail and a commitment to innovation, Evoq sets a new industry standard, redefining the possibilities of cove lighting. Light… Read More…

  • Airlight and CDm2 Join Forces to Offer Casambi Bluetooth Control Solutions

    Airlight and CDm2 Join Forces to Offer Casambi Bluetooth Control Solutions

    May 23, 2024 CDm2 LIGHTWORKS is excited to announce a new partnership with Airlight; the authorized Canadian partner for Casambi, offering customized, future-proof control systems utilizing low energy Bluetooth 5.3. “Partnering with Airlight enables CDm2 to deliver Casambi innovative technology to our clients in support of their diverse project requirements.” Casambi is designed to be flexible… Read More…