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

  • Magic Lite & EFC Release Student Scholarship

    January 18, 2023 Magic Lite was thrilled to have participated in the 2022 EFC Scholarship Program and recently present the Magic Lite Future Leaders Award of $2,500 to Anthony Faustin of Sherbrook University in Montreal. As successful applicant, Anthony demonstrated leadership amongst his peers as well as in his community, and showed true entrepreneurial spirit… Read More…

  • Ascot Capital Group Announces a Change in the Presidency and the Appointment of Rob Nadler as President

    January 18, 2023 Rob Nadler, Stanpro’s Executive Vice-President will be promoted and assume the role of President of Ascot’s “General & Emergency Lighting Group – Stanpro, AimLite & Beluce” effective June 1, 2023. Rob joined Stanpro in 2001 and was instrumental in its tremendous growth over the past 20 years, including the organic acceleration of the business, the… Read More…


Design

  • LIT Design Awards Light Art Project Winner: Integral Group

    LIT Design Awards Light Art Project Winner: Integral Group

    December 19, 2022 Prize(s) Winners in Light Art Project Company Integral Group Lead Designers Ellie Niakan + Catherine Chan Photo Credits Catherine Chan Completion Date December 21, 2021 Project Location New Westminster, British Columbia, Canada Although appearing as solitary, trees are connected to one another through vast underground systems known as mycorrhizal networks. Through these hidden systems—a symbiotic relationship between plants… Read More…

  • LIT Lighting Design Awards: Capital Park Landscape, Victoria, BC

    LIT Lighting Design Awards: Capital Park Landscape, Victoria, BC

    December 5, 2022 Located in one of Victoria’s most historic neighborhoods, the Capital Park Mixed-Use Development is made up of seven buildings stretching across three lots and is responsible for nearly an entire city block of Victoria’s downtown core. The project took place over the span of three phases and eight years. The first phase… Read More…


New Products

  • Feel Stem Suspension

    January 18, 2023 Designed by Milan-based Sara Moroni, the Feel Suspension Light from Penta combines texture, light, and quiet. It features sound-absorbing textile discs and luminous stems. The coloured discs, in matching or contrasting colours, give life to ever-changing configurations. Suspended from the ceiling, the Feel absorbs noise, letting you enjoy the silence. Feel comes… Read More…

  • CorePro LED Mini Cylinder

    January 18, 2023 Upgrade to LED – Looking to make an impact for retail display areas? The #CorePro LED Mini Cylinder by #Lightolier delivers both lumen and CBCP performance equivalent to that of most 50W MR16 halogen luminaires. These top quality track lights consume 82% less energy and provide easy maintenance.The completely integrated driver, thermal management, unitized optics and… Read More…