Optiva Inc. Secures 45-Day Grace for Senior Secured Noteholders
Optiva Inc. Negotiates with Noteholders on Potential Transaction
Optiva Inc. (TSX: OPT) is currently in discussions with its noteholders, focusing on a transaction that may involve exchanging its outstanding notes for a mix of shares and new notes connected to a strategic partner or a merged entity. This endeavor has garnered the support of approximately 85% of its senior secured noteholders.
Business Continuity During Negotiations
Despite ongoing negotiations, Optiva is committed to maintaining its operations seamlessly, ensuring all commitments to customers, employees, and vendors are met. The company assures stakeholders that its daily functions will not be disrupted during this critical period.
Details of the Support Agreement
The support agreement provides a vital 45-day window, allowing time for Optiva’s special committee to engage in meaningful negotiations with noteholders and potential merger counterparts. During this grace period, noteholders have opted to refrain from pursuing any rights or remedies concerning payment defaults, specifically related to the upcoming maturity of the notes.
Financial Liquidity and Commitments
Optiva has communicated its financial stability, highlighting a liquidity cushion with approximately $12 million in cash, which will support its operational requirements and financial obligations during this negotiation phase. This robust liquidity positions Optiva to confidently continue its service commitments throughout the transaction discussions.
Positive Outlook from Leadership
Robert Stabile, Chief Executive Officer of Optiva, expressed gratitude for the trust customers place in the company. He also noted the organization's strong momentum as it secures new clients and enhances product offerings, showcasing the team’s commitment to innovation and service excellence. Stabile is optimistic about the potential benefits for customers from the upcoming ownership structure adjustments.
Proposals for the Exchange of Notes
The potential transaction under consideration would encompass exchanging the full principal amount of the notes, including accrued interest, for a combination of equity and new financial instruments associated with Optiva, alongside a merger with a strategic third party. Common shareholders may face nominal valuations for their shares as part of this potential restructuring.
Future Approval Requirements
While negotiations move forward, it is essential to note that the finalization of any potential transaction will hinge on several approvals. This includes consenting from Optiva’s securityholders, legal requirements for any arrangement if structured as such, approval from the Toronto Stock Exchange, and all necessary regulatory clearances.
Contact Information
For inquiries, current noteholders can reach out to Marwan Kubursi via email, while media inquiries can be directed to Misann Ellmaker. Those seeking investor relations can connect through the dedicated email for stakeholders and investors.
Frequently Asked Questions
What is the significance of the support agreement for Optiva?
The support agreement allows Optiva to negotiate with its noteholders without the immediate pressure of payment defaults, facilitating smoother discussions on a potential transaction.
How will Optiva maintain business continuity?
Optiva is committed to continuing its operations as usual, fulfilling all obligations to customers, employees, and suppliers during the negotiation period.
What financial position does Optiva hold currently?
Optiva has approximately $12 million in cash reserves, providing adequate liquidity to support its operations while negotiations are underway.
What could the potential transaction mean for shareholders?
Shareholders may receive nominal consideration for their shares, as any merger or transaction may alter equity valuations.
What approvals are needed for the potential transaction to be finalized?
The transaction will require approval from shareholders, regulatory bodies, and possibly court authorizations depending on the structure of the deal.
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