Exela Technologies Announces Plans to Deploy over $400 Million of Capital to Execute the Next Strategic Step: Significantly Reduce Debt
September 30 2021 - 2:30PM
Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA),
a global business process automation leader across numerous
industries, today announced that the Company plans to deploy over
$400 million of capital. The move encapsulates the Company’s
multipart strategy to materially reduce its total amount of debt
and associated interest expense, including lowering the cost of
debt. The Company believes that the strengthened balance sheet and
improved cash flow generation will further expand shareholder
value.
In addition to liquidity of $207 million as of
September 28, 2021, proceeds from the recently announced equity
financing are expected to provide the Company with over $400
million in capital to deploy in this initiative. Exela plans to use
these funds, among other uses, for the purchase or retirement of
debt, investment in its business and other general corporate
purposes.
Exela’s weighted average interest rate for the
outstanding debt was 9.6% for FY 2020. The total debt related
payments (including cash interest paid and amortizations) were $173
million for the 12 months ended December 31, 2020, and $85 million
for the 6 months ended June 30, 2021, respectively. To date, the
Company has already bought back $95 million of debt via open market
purchases using $64 million of cash on hand. These executed debt
purchases have improved the Company’s annual cash flow by $11
million. Exela is also on track to achieve the remainder of the
previously announced $25 million annual cash flow improvement
target within the next 3 months. Every $100 million of debt
reduction improves incremental annual cash flow between $10-13
million creating significant value for shareholders.
Par Chadha, Exela’s Executive Chairman, noted,
“While we have made significant strides, we believe that the
execution of this next step positions us well to continue expanding
shareholder value. I am not pleased with the speed of our capital
deployment strategy and hope to prudently accelerate it. We are
thankful to our large, growing, and global shareholder base, our
employees and customers to become a global powerhouse with leading
brand recognition in the industries we serve.”
Note: Liquidity as defined per the third
amendment of the credit agreement effective May 15, 2020. Includes
$24 million as addbacks.
For more Exela news, commentary, and industry
perspectives, visit: https://investors.exelatech.com/
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The information posted on the Company's website
and/or via its social media accounts may be deemed material to
investors. Accordingly, investors, media and others interested in
the Company should monitor the Company's website and its social
media accounts in addition to the Company's press
releases, SEC filings and public conference calls and
webcasts.
About Exela
Technologies
Exela Technologies is a business process
automation (BPA) leader, leveraging a global footprint and
proprietary technology to provide digital transformation solutions
enhancing quality, productivity, and end-user experience. With
decades of experience operating mission-critical
processes, Exela serves a growing roster of more than
4,000 customers throughout 50 countries, including over 60% of the
Fortune® 100. Utilizing foundational technologies spanning
information management, workflow automation, and integrated
communications, Exela’s software and services include
multi-industry, departmental solution suites addressing finance and
accounting, human capital management, and legal management, as well
as industry-specific solutions for banking, healthcare, insurance,
and the public sector. Through cloud-enabled platforms, built on a
configurable stack of automation modules, and over 18,000 employees
operating in 23 countries, Exela rapidly deploys
integrated technology and operations as an end-to-end digital
journey partner.
Forward-Looking Statements
Certain statements included in this press
release are not historical facts but are forward-looking statements
for purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as "may",
"should", "would", "plan", "intend", "anticipate", "believe",
"estimate", "predict", "potential", "seem", "seek", "continue",
"future", "will", "expect", "outlook" or other similar words,
phrases or expressions. These forward-looking statements include
statements regarding our industry, future events, estimated or
anticipated future results and benefits, future opportunities
for Exela, and other statements that are not historical facts.
These statements are based on the current expectations
of Exela management and are not predictions of actual
performance. These statements are subject to a number of risks and
uncertainties, including without limitation those discussed under
the heading "Risk Factors" in Exela's Annual Report and
other securities filings. In addition, forward-looking statements
provide Exela's expectations, plans or forecasts of
future events and views as of the date of this
communication. Exela anticipates that subsequent events
and developments will cause Exela's assessments to
change. These forward-looking statements should not be relied upon
as representing Exela's assessments as of any date
subsequent to the date of this press release.
Investor and/or Media Contacts:
Vincent
KondaveetiE: vincent.kondaveeti@exelatech.com T:
929-620-1849
Mary Beth
BenjaminE: IR@exelatech.com T:
646-277-1216
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