Airspan to Receive Up to $95 Million in New Equity Financing and Eliminate All Existing Funded Debt
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Insights
The agreement between Airspan Networks Holdings Inc. and its creditors, facilitated by Fortress Investment Group, is a strategic move designed to enhance the company's financial stability. The restructuring plan, which includes a substantial equity infusion and the elimination of existing debt, signifies a pivotal shift aimed at optimizing Airspan's capital structure. The decision to transition Airspan into a private entity reflects a broader industry trend where companies seek to streamline operations and focus on long-term growth without the pressures of public market scrutiny.
The provision of $53 million in debtor-in-possession (DIP) financing is a critical component that will ensure Airspan's business continuity throughout the restructuring process. This financial maneuver is a common practice in prepackaged bankruptcies, allowing companies to maintain operational liquidity. The move is likely to be well-received by the market as it suggests a controlled and consensual approach to restructuring, which typically mitigates the risk of disruptive operational or financial surprises.
Airspan's emphasis on 5G technology and Open RAN is indicative of its alignment with current telecom industry trends focused on innovation and flexibility. The restructuring may provide Airspan with a competitive edge, as a debt-free balance sheet can enable increased investment in research and development. This is particularly relevant as the telecom sector is known for its rapid technological advancements and the need for constant innovation to stay ahead.
The market for 5G and private network solutions is expected to grow significantly and Airspan's strategic positioning in these areas could potentially capture a larger market share. However, the success of this strategy will depend on the company's ability to effectively leverage its intellectual property portfolio and deliver on its product promises post-restructuring.
Airspan's role as a pioneer in end-to-end Open RAN and private network solutions places it at the forefront of a transformative phase in telecommunications. The industry is rapidly moving towards more open and interoperable architectures and Airspan's focus on these areas suggests it is well-positioned to capitalize on these changes. The restructuring could facilitate Airspan's agility and responsiveness to market demands, which is often more challenging for companies burdened with significant debt.
The company's commitment to maintaining operations during the recapitalization process is vital for customer confidence and retention. In a highly competitive landscape, any sign of operational instability can lead to customer attrition. Therefore, the prepackaged nature of the restructuring and the full support of major creditors are reassuring signals to customers and partners of Airspan's operational solidity and future prospects.
Enters Agreement with Creditors to Strengthen Financial Foundation and Right-Size Balance Sheet
Airspan Will Become Private Company with Strong Balance Sheet and Greater Financial Flexibility Majority-Owned by Fortress
Will Operate in Normal Course While Implementing Prepackaged Recapitalization on an Expedited Basis with Full Support of all Major Creditors
Secures Commitment for Over
“This support agreement is the culmination of a strategic review process, and we believe it is the best path forward for Airspan to continue providing exceptional services and products to our customers worldwide,” said Glenn Laxdal, President and Chief Executive Officer at Airspan. “By strengthening the Company financially with new capital and a debt-free balance sheet, we will be better positioned to execute our plan to capitalize on the significant growth opportunities across our public and private network markets. We appreciate the support and engagement of all of our stakeholders as we build Airspan for the future.”
“Airspan provides a critical, next-generation suite of solutions for the broader telecommunications industry and possesses an invaluable intellectual property portfolio to protect its innovations,” said Drew McKnight, Co-Chief Executive Officer and Managing Partner at Fortress. “We are excited about the Company’s long-term growth opportunities. Our significant commitments through this Agreement reflect our conviction that a recapitalized Airspan can further solidify its leadership position within the wireless industry. We look forward to continuing to support the Company’s talented management team throughout this process and in the future.”
Airspan and its
Airspan has received a commitment from Fortress affiliates for over
Airspan is filing a number of customary “first day” motions with the Court to enable it to continue uninterrupted operations during the financial restructuring, including to continue paying employee wages and providing benefits to employees, and to pay vendors and suppliers in full in the ordinary course of business.
As part of the transaction, Airspan’s existing common stockholders will have the opportunity to receive in exchange for their shares their pro rata share of a total of
Additional information about Airspan’s restructuring process and proceedings is available at https://dm.epiq11.com/Airspan, by calling (888) 851-9531 or +1 (971) 251-2626 for calls originating outside of the
Dorsey & Whitney LLP is serving as legal counsel to Airspan. VRS Restructuring Services, LLC is serving as Airspan’s financial advisor and Intrepid Investment Bankers LLC is serving as Airspan’s investment banker. Davis Polk & Wardwell LLP is serving as legal counsel to Fortress.
About Airspan
Airspan Networks Holdings Inc. is a
About Fortress Investment Group
Fortress Investment Group LLC is a leading, highly diversified global investment manager. Founded in 1998, Fortress had
Cautionary Statement Regarding Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about Airspan’s ability to obtain equity and DIP financing from Fortress and its affiliates, and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. Any such forward-looking statements are based upon the current beliefs and expectations of Airspan’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond Airspan’s control.
Actual results, performance or achievements may differ materially, and potentially adversely, from any forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond Airspan’s control. For further information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of Airspan’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the US Securities and Exchange Commission. All information set forth herein speaks only as of the date hereof in the case of information about Airspan or the date of such information in the case of information from persons other than Airspan, and Airspan disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240330459160/en/
Media:
Jonathan Gasthalter/Mark Semer/Grace Cartwright
Gasthalter & Co.
(212) 257-4170
Airspan@gasthalter.com
Investor Relations:
Brett Scheiner
561-893-8660
IR@airspan.com
Source: Airspan Networks Holdings Inc.
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