Israeli hotel company Selina (Nasdaq: SLNA), listed on Wall mStreet in late 2022 with a market cap of $1.2 billion, thanks to a SPAC merger, currently has a negligible market cap of just $21 million, having lost 99% of its value .
The company already announced several months ago that it was stopping its geographic expansion and closing its loss-making establishments. Selina is now working to improve its balance sheet and has announced a debt settlement with bondholders and a new fundraising, which will dilute existing shareholders’ stakes as control of the company could shift in new hands and could be delisted from Nasdaq.
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Selina operates hotel properties around the world targeting millennial and generation Z travelers. The company was founded by CEO Rafael Museri and Daniel Rudasevski – both veterans of the IDF’s elite units. Earlier this week, Selina announced that it had raised $68 million from Osprey Investments, a subsidiary of Global University Systems (GUS), a European higher education platform.
In June, Osprey invested $15.6 million in Selina, in debt that could be converted into equity. In the current agreement, an additional $20 million will be allocated for Selina’s shares and additional amounts in the future, subject to certain conditions being met. Osprey will be allowed to appoint four directors.
In April, Museri and Rudasevski held a 37% stake in Selina, but this will now be diluted from 75 to 90% and leave them with only a few percent stake.
At the same time, Selina entered into a debt agreement with the majority of its bondholders. Last year, Selina issued a $148 million convertible bond with 6% annual interest payable every six months. The bond’s convertible price was $11.5, a far cry from the current stock price of just $0.19. As part of the debt settlement, bondholders agreed to postpone the repayment date for three years and to convert part of the debt into shares, options and promissory notes immediately. Bondholders will also be able to appoint an independent director to the board of directors.
Published by Globes, Israel Business News – fr.globes.co.il – December 5, 2023.
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