Retires
Nomura Senior Secured Credit Facility
Makes
Strategic Investment and Loan in Joint Venture Overseeing JOANN's Liquidation
LOS ANGELES, Feb. 27, 2025 /PRNewswire/ -- B. Riley
Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the
"Company"), a diversified financial services company, today announced
that it has entered into a new $160 million senior secured debt facility
("Term Loan Facility") provided by funds managed by Oaktree Capital
Management, L.P. ("Oaktree").
B. Riley used approximately
$118 million to retire the outstanding debt under its Nomura Senior Secured
Credit Agreement and the rest for working capital, including up to $35 million
in respect of its portion of the loan and investment in the joint venture
overseeing the liquidation of JOANN, the fabric and crafts retailer that is
commencing store closing sales at all 790 locations nationwide.
On February 26, 2025, GA Group,
in which B. Riley has a 44 percent ownership interest, was recognized as the
successful bidder to serve as JOANN's exclusive agent to monetize substantially
all of JOANN's assets pursuant to an auction approved by the U.S. Bankruptcy
Court for the District of Delaware. The liquidation, which includes
approximately $2 billion in retail inventory and is one of the largest
transactions in GA Group's 40-year history, is expected to be completed in
approximately 12 weeks.
Bryant Riley, Chairman and
Co-Chief Executive Officer of B. Riley Financial, commented: "Our new credit agreement with
Oaktree represents an important step forward for B. Riley and an extension of
our relationship with Oaktree following last year's establishment of the GA
Group. The new three-year facility provides us with greater financial and
strategic flexibility, and allows us to execute a number of other
initiatives."
Mr. Riley concluded, "Notably, the participation in
the JOANN liquidation demonstrates the early success of our partnership with
Oaktree to form GA Group, a leading asset disposition, valuation, appraisal and
real estate services firm, with extensive expertise in large-scale retail
liquidations. The successful bid in a competitive bankruptcy process showcases
the potential of this business with the additional support and backing of
Oaktree. B. Riley stands to benefit as an investor in the liquidation and indirectly
through our equity stake in GA Group. We are pleased to remain a minority
investor and active participant in GA Group and look forward to continuing to
benefit from the upside potential of this business."
The Term Loan Facility carries
an interest rate equal to the three-month secured overnight financing rate
("SOFR") plus 8.00%. In addition, the Company issued to Oaktree
warrants to purchase an aggregate of 1,832,290 common shares (representing
approximately 6% of the outstanding common stock) at an exercise price of $5.14
per share, a 20 percent premium to the 30-day VWAP prior to the issuance of the
warrants. The warrants are exercisable for a period of seven years from the
issuance date.
As previously announced, B.
Riley will be reporting preliminary full year 2024 results on Monday, March 3
after the market close. The Company will host a conference call followed by a
question-and-answer session with analysts and investors at 4:30 p.m. ET on the
same day. Investors may access the live audio webcast and archived recording at https://ir.brileyfin.com/events-and-presentations.
Advisors�
Sullivan & Cromwell LLP served as legal advisor to B. Riley, and Kirkland
& Ellis LLP served as legal advisor to Oaktree.
About B. Riley Financial
B. Riley Financial is a
diversified financial services company that delivers tailored solutions to meet
the strategic, operational, and capital needs of its clients and partners. B.
Riley leverages cross-platform expertise to provide clients with full service,
collaborative solutions at every stage of the business life cycle. Through its
subsidiaries and affiliated entities, B. Riley provides end-to-end financial
services across investment banking, institutional brokerage, private wealth and
investment management, financial consulting, corporate restructuring,
operations management, risk and compliance, due diligence, forensic accounting,
litigation support, appraisal and valuation, auction, and liquidation services.
B. Riley opportunistically invests to benefit its shareholders, and certain
affiliates originate and underwrite senior secured loans for asset-rich
companies. B. Riley refers to B. Riley Financial, Inc. and/or one or more of
its subsidiaries or affiliated companies. For more information, please visit www.brileyfin.com.
About Oaktree
Oaktree is a leader
among global investment managers specializing in alternative investments, with
$202 billion in assets under management as of December 31, 2024. The firm
emphasizes an opportunistic, value-oriented, and risk-controlled approach to
investments in credit, equity, and real estate. The firm has more than 1,200
employees and offices in 23 cities worldwide. For additional information,
please visit Oaktree's website at http://www.oaktreecapital.com/.
Forward-Looking Statements
Statements made in this press release that are not descriptions of historical
facts are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are based on management's current
expectations and assumptions and are subject to risks and uncertainties. If
such risks or uncertainties materialize or such assumptions prove incorrect,
our business, operating results, financial condition, and stock price could be
materially negatively affected. You should not place undue reliance on such
forward-looking statements, which are based on the information currently
available to us and speak only as of today's date. All statements other than
statements of historical fact are forward-looking statements. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the Company's performance or achievements to be
materially different from any expected future results, performance, or
achievements. Forward-looking statements speak only as of the date they are
made and the Company assumes no duty to update forward-looking statements,
except as required by law. Actual future results, performance or achievements
may differ materially from historical results or those anticipated depending on
a variety of factors, some of which are beyond the control of the Company,
including, but not limited to, the risks described from time to time in the
Company's periodic filings with the SEC, including, without limitation, the
risks described in the Company's 2023 Annual Report on Form 10-K and Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2024 under the
captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" (as
applicable). These factors should be considered carefully, and readers are
cautioned not to place undue reliance on such forward-looking statements. All
information is current as of the date this press release is issued, and the
Company undertakes no duty to update this information.
Contacts
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