Lumileds files for bankruptcy protection

Lumileds Holding B.V. (referred to as "Lumileds" or the "Company"), a global leading innovative lighting Solution provider, has recently announced that it has reached a Restructuring Support Agreement (RSA) with most of the creditors under its first lien debt financing facility regarding terms for a comprehensive financial restructuring.

This financial restructuring will significantly reduce the company's leverage ratio and strengthen its balance sheet by over $1.3 billion (helping to reduce debt by $1.3 billion), accelerating corporate development. Meanwhile, with new liquidity injections of up to $275 million, the company will be empowered to further invest in innovation to pursue more strategic opportunities.

To effectively reduce its leverage ratio, Lumileds has filed a narrow, pre-packaged Chapter 11 bankruptcy protection petition and submitted a related plan (the "Plan") with the U.S. Bankruptcy Court for the Southern District of New York (the "Court"), pursuant to Chapter 11 of the U.S. Bankruptcy Code. The scope covers only Lumileds' corporate entities in the United States and the Netherlands. Lumileds' subsidiaries and affiliates in Europe, Asia, and other locations outside the United States are not included in this filing and are not affected by the related proceedings.

Prior to filing the reorganization application, the company has already obtained necessary support from creditors and plans to confirm the reorganization plan within approximately 60 days, thereby exiting bankruptcy protection proceedings.

Lumileds CEO Matt Roney stated: "As a leader in the lighting industry, over the past few years we have been working to improve our cost structure and innovation pipeline to effectively capitalize on market trends. Global supply constraints, the COVID-19 pandemic, and the Ukraine crisis have presented ongoing challenges; therefore, we proactively took measures to reduce the company's leverage. This capital restructuring will enable us to further solidify our position as a leading innovator in the professional lighting market. We believe that the most effective and efficient way to achieve this goal is through this pre-planned bankruptcy restructuring, which will also be accompanied by a significant increase in corporate liquidity. We thank our creditors for their support; they also believe that Lumileds with a stronger balance sheet will possess greater long-term value and development potential."

Lumileds表示，公司在美国和荷兰以外的业务运营不在本次重组范围内。公司已提交首日动议（“first day” motions），以寻求法院授权，使公司业务和设备能够继续正常运营，且不对客户、供货商、供应商及员工造成影响。作为首日动议的一部分，公司已寻求法院批准继续按期支付供货商和供应商的所有款项。此外，公司计划照常发放员工工资和福利，不会中断。

Mr. Roney also stated: "Our top priority is to provide unprecedented solutions for lighting, safety, and health. This comprehensive plan to reduce leverage and enhance liquidity will make us a more attractive and stronger partner, continuing to drive innovation in LED technology and providing customers with new products and solutions."

Pursuant to the terms of the Restructuring Support Agreement, existing secured creditors will commit to supporting and voting in favor of a transaction. Upon execution of this transaction, Lumileds' long-term debt of USD 1.3 billion will be reduced through a debt-to-equity swap, lowering the company's total debt from approximately USD 1.7 billion to USD 400 million. This USD 400 million will primarily consist of repurchased debt and post-(financial restructuring) filing loans, entering into a five-year exit mechanism.

The restructuring support agreement also includes up to $275 million in debtor-in-possession (DIP) financing, which is part of the restructuring process. If approved by the court, DIP financing, combined with the company's available cash reserves and operating cash flow, is expected to provide Lumileds with sufficient working capital to continue fulfilling all its obligations to customers, suppliers, and vendors, as well as to pay employee salaries and benefits.

Source: Lumileds