In a significant financial restructuring, B. Riley Financial, Inc. has announced amendments to its credit facilities and a change in its executive team. On Monday, the company disclosed through an SEC filing that it has modified its existing credit agreement, resulting in an increased interest rate among other adjustments.
The Los Angeles-based investment firm, which deals in diversified financial services, entered into a fourth amendment of its credit agreement on September 17, 2024. The amendment led to the repayment of approximately $85.9 million of its term loans, leaving an outstanding principal of $388.1 million. Concurrently, the company terminated its $100 million revolving credit facility.
Key changes in the terms include an increase in the interest rate for SOFR Loans to a margin of 7.00% in cash or an option of 6.00% in cash plus 1.50% in PIK Interest. The Base Rate Loans will accrue at the Base Rate plus a margin of 6.00% in cash or an option of 5.00% in cash plus 1.50% in PIK Interest. Additionally, the company must reduce its term loan principal to no more than $100 million by September 30, 2025, and has revised its mandatory prepayment provisions and financial maintenance covenants.
In tandem with the financial restructuring, B. Riley Financial also announced the departure of Kenny Young from his executive roles within the company, including President of the Company and CEO of B. Riley Principal Investments, LLC, effective September 20, 2024.
Young will continue to work with the company as a consultant under a one-year agreement, earning an annual fee of $250,000. His service agreement with Babcock & Wilcox Enterprises, Inc., where he served as CEO through a subsidiary of B. Riley Financial, was also terminated on the same day.
These strategic moves come as B. Riley Financial aims to streamline its operations and financial obligations. The company's stock is traded on the Nasdaq Global Market under the ticker symbol RILY. This information is based on a press release statement and provides a snapshot of the company's current financial and leadership changes.
In other recent news, B. Riley Financial has been navigating a series of significant developments. The company reported an estimated net loss between $435 million to $475 million for the second quarter of 2024, attributed to non-cash impairment charges and write-downs. Despite this, B. Riley maintained an operating adjusted EBITDA between $50 million to $55 million, demonstrating the resilience of its core businesses.
B. Riley Financial also announced plans to sell a majority stake in its Great American Group and secure financing for its brand portfolio, with the aim of significantly reducing its debt by the end of 2024. Concurrently, the company's founder, chairman, and co-CEO, Bryant Riley, has proposed a buyout to take the company private, offering to purchase all outstanding shares not already owned by him for $7.00 each.
In terms of personnel changes, B. Riley Securities, a subsidiary of B. Riley Financial, recently appointed Brendon Philipps as Managing Director to lead their Capital Structure Advisory and Liability Management efforts. Philipps, who brings nearly 15 years of experience in the field, was previously with Guggenheim Partners.
InvestingPro Insights
In light of B. Riley Financial's recent financial restructuring and leadership changes, investors may find value in the latest data and insights from InvestingPro. As of the last twelve months leading up to Q1 2024, the company's market capitalization stands at $169.35 million, reflecting the scale of its operations within the investment services sector. Despite challenging market conditions, B. Riley has maintained a commitment to returning value to shareholders, boasting a significant dividend yield of 34.48% as of the latest data, which is particularly noteworthy given the broader economic context.
InvestingPro Tips suggest that while the stock has experienced high price volatility, it has consistently paid dividends for 11 consecutive years, underscoring a degree of reliability in shareholder returns. Moreover, the company's liquid assets exceed its short-term obligations, indicating a sound liquidity position that may reassure investors concerned about the company's ability to meet its immediate financial commitments.
For investors seeking further analysis and additional InvestingPro Tips, there are 9 more tips available that could provide deeper insights into B. Riley Financial's performance and potential investment opportunities. These tips can be explored through the company-specific page at https://www.investing.com/pro/RILY.
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