- Agreement in principle on terms for
$28 millionin equity financing, with an initial tranche of $20 millionexpected to be funded in December 2023, subject to definitive agreements being entered into
- Agreement in principle on terms for up to
$40 millionof optional equity financing, subject to definitive agreements
- Agreement in principle on terms for restructuring of its
$147.5 million6.00% convertible senior notes due 2026 to reduce indebtedness, extend maturity and PIK interest
Potential Financing of Up to
Selina has agreed in principle to commercial terms for strategic investments totaling up to
- The first tranche would comprise an immediate
$20.0 millioninvestment by Osprey in exchange for ordinary shares in the Company;
- An additional
$8.0 millioninvestment would be payable over a period ending 12 months from closing, subject to further shareholder approval for the issuance of ordinary shares required for elements of the transaction;
- As part of the funding arrangements, approximately
$8.7 millionof indebtedness held by (or to be assumed by) Osprey, including $4.7 millionof 2026 Notes and $4.0 millionof the Initial Osprey Notes, would be converted into equity and Selina would be required to invest $4.0 millioninto FutureLearn, a British digital education platform that provides online courses, microcredentials and other degrees, which is owned by GUS; and
- The arrangements also provide for an optional third tranche of funding that includes up to
$20.0 millionfrom GUS within a period of 12 months from closing, with the holders of the 2026 Notes that participate in the Note Restructuring having a right to participate, and up to an additional $20.0 millionfrom certain other parties, which additional investment is anticipated to occur within 30 days after the closing of the transaction.
Liability Management Update
As of the date hereof, holders of 80.5% of 2026 Notes, representing
If completed, this transaction would help ensure a transition to a more durable balance sheet and robust capital structure and provide the Company with liquidity to support its path to profitability.
The transactions would involve the following additional conditions and key terms:
- Osprey would have the right to appoint a total of four directors to the Board of Directors of the Company and designate a certain number of members of the Board committees, subject to the Company’s continued compliance with the Nasdaq governance requirements so long as the Company remains a listed company, while two members of the Board could remain as executive directors.
- The participating noteholders would have the right to appoint one director to the Company’s Board of Directors, subject to the approval of Osprey, not to be unreasonably withheld.
- The parties would agree to support, and, as applicable, vote in favour of the delisting of the ordinary shares of the Company from the Nasdaq Global Market (“Nasdaq”) and the deregistration as an
SEC-reporting company subject to applicable conditions, with the timing of such take-private transaction to be determined.
The terms remain subject to finalization of the definitive documentation for the transactions. The parties intend to finalize and enter into all agreements required for the Note Restructuring and new investment from Osprey as soon as practicable after the date hereof and will provide further updates as required. The other primary terms of the proposed transactions and their proposed impact on the capital structure of the Company, including a potential change of control of the Company, are explained further in the 6-K.
There can be no assurances that the transactions will be successfully completed or that the Company will have sufficient liquidity to complete the transactions.
Selina (NASDAQ: SLNA) is one of the world’s largest hospitality brands built to address the needs of millennial and Gen Z travelers, blending beautifully designed accommodation with coworking, recreation, wellness, and local experiences. Founded in 2014 and custom-built for today’s nomadic traveler, Selina provides guests with a global infrastructure to seamlessly travel and work abroad. Each Selina property is designed in partnership with local artists, creators, and tastemakers, breathing new life into existing buildings in interesting locations in 24 countries on six continents – from urban cities to remote beaches and jungles. To learn more, visit Selina.com or follow Selina on Twitter, Instagram, Facebook, Linkedin or YouTube.
This Report on Form 6-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events, and include terms such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential,” or “continue,” or the negatives of these terms or variations of them or similar terminology. In particular, statements in this Report regarding our beliefs pertaining to our ability to obtain additional funding, restructure liabilities and/or pursue other strategic alternatives. Such forward-looking statements are subject to risks, uncertainties (some of which are beyond our control), and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon assumptions that, while we consider reasonable, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, without limitation: potential negative impacts on our financial results as a result of changes in travel, hospitality, and real estate markets, including the possibility that travel demand and pricing do not recover to the extent anticipated, particularly in the current geopolitical and macroeconomic environment; volatility in the capital markets; our ability to execute on our plans to increase occupancy and margins; the potential inability to meet our obligations under our commercial arrangements and debt instruments; delays in or cancellations of our efforts to develop, redevelop, convert or renovate the properties that we own or lease; challenges to the legal rights to use certain of our leased hotels; risks associates with operating a significant portion of our business outside of