4L Holdings Enters into Financial Restructuring, and Official Statement from Clover

4L Holdings Enters into Financial Restructuring, and Official Statement from Clover

4L Holdings (“4L”), which operates as Clover Technologies Group announced that it, along with certain of its affiliates, has entered into a restructuring support agreement (the “Agreement”) – that will equitize all of the Company’s approximately $644 million in long-term debt – with the majority of its equity holders and a group of its lenders representing over 67% of its outstanding long-term debt.

In addition to the restructuring, the Agreement also supports two recently announced strategic transactions: Clover Wireless’ acquisition of Teleplan, which closed on December 4, 2019, and the sale of Clover Imaging to Norwest Equity Partners, which was announced on November 21, 2019, and is expected to close in mid-December 2019.  Upon consummation of the sale of Clover Imaging, the proceeds from the sale will be used to pay down a portion of 4L’s current outstanding long-term debt.

Under the Agreement, the comprehensive financial restructuring of 4L – the parent company of Clover Wireless – is expected to be implemented through a prepackaged chapter 11 plan of reorganization (the “Plan”) that would be filed shortly. The Company has already received significant support for the Plan from a group of its lenders and equity holders, who have consented to the transaction in the Agreement, and is currently in the process of soliciting additional support from all of its lenders and equity holders, with the goal of obtaining consensus. As a result, it is expected that 4L will be able to complete its financial restructuring process quickly. In addition, the Company’s operations are expected to continue as usual throughout the financial restructuring process. 4L’s non-U.S. subsidiaries and affiliates – including Teleplan – are not expected to be included in the financial restructuring process, including any chapter 11 filing, or affected by the process.

Clover Imaging will not be part of the financial restructuring process, including any Chapter 11 filing.

This is the important fact that Clover Imaging Group would like to highlight and emphasize in its official statement. As announced on November 21, 2019, Clover Imaging Group’s executive leadership team and Norwest Equity Partners announced the acquisition of the Clover Imaging Group business unit from 4L Holdings Group. Following the close of the transaction, Clover Imaging Group will be a separate and independent company. There will be no shared financials, facilities, operations, or personnel with 4L Holdings Group or Clover Wireless.

“We are confident that the acquisition will close in the very near future. As we communicated in November when we announced the agreement with Norwest Equity Partners, following the close of the transaction, Clover Imaging Group will have a conservative capital structure and greatly enhanced financial flexibility. We are committed to our go-to-market strategy and excited for the opportunities in front of us,” said Jim Cerkleski, Chairman, Clover Imaging Group.

RT Media will follow the updates of the acquisition.