Fossil Group completes debt restructuring and cancels $150 million in notes

Fossil Group, Inc. (NASDAQ:FOSL) announced Thursday it has completed a major debt restructuring, including the cancellation of $150 million in outstanding 7.00% Senior Notes due 2026. The company executed the restructuring through a previously announced exchange offer and concurrent rights offering, as part of a plan under the UK Companies Act.

According to a statement based on a filing with the Securities and Exchange Commission, noteholders participating in the rights and exchange offers provided $32.5 million in new financing. In exchange, these investors received $32.5 million in 9.500% First-Out First Lien Secured Senior Notes due 2029 and 954,070 shares of common stock. They also exchanged $120.2 million of the old notes for an equal principal amount of the new First-Out notes, and received an additional $945,946 in First-Out notes as a consent premium.

Noteholders who did not participate in the rights offering received $29.8 million in Second-Out Second Lien Secured Senior Notes due 2029 in exchange for their old notes, plus $53,858 in Second-Out notes as a consent premium if they tendered and consented to the plan.

In addition, all noteholders received approximately 3 million warrants, which entitle holders to purchase either one share of common stock or one pre-funded warrant per warrant held. The exercise price is $0.50 per share for common stock and $0.49 per pre-funded warrant, with certain ownership limitations in place. Pre-funded warrants are exercisable at $0.01 per share and do not expire.

The First-Out notes bear interest at 9.500% and mature on January 1, 2029. The Second-Out notes bear interest at 7.500% and mature on June 30, 2029. Both series are secured by liens on substantially all assets of Fossil Group and its guarantor subsidiaries, and include covenants restricting certain financial and operational activities.

As part of the transactions, certain supporting noteholders received $1.625 million in First-Out notes as a backstop premium for their commitment to the rights offering.

The company also amended its credit agreement and entered into new intercreditor agreements to reflect the revised debt structure.

This information is based on a statement in a press release and Fossil Group’s SEC filing.

In other recent news, Fossil Group, Inc. has made significant progress in restructuring its 7.00% Senior Notes due 2026. The United States Bankruptcy Court for the Southern District of Texas has granted a Chapter 15 recognition order, giving effect to a restructuring plan approved under Part 26A of the UK Companies Act 2006. This plan, sanctioned by the High Court of Justice of England and Wales, involves the cancellation of existing notes and the issuance of new secured senior notes: 9.500% First-Out First Lien Secured Senior Notes and 7.500% Second-Out Second Lien Secured Senior Notes, both due in 2029.

Fossil Group has also extended its exchange offer for these notes after receiving 82.67% of valid tenders, falling short of the required 90%. The expiration date for this offer has been moved to November 10, 2025. Additionally, Fossil Group’s subsidiary, Fossil (UK) Global Services Ltd, is set to hold a meeting for creditors to consider the restructuring plan. The company has also extended the deadline for its exchange offer, consent solicitation, and rights offering, originally set for October 7, to October 15, 2025. These developments indicate Fossil Group’s ongoing efforts to manage its debt obligations effectively.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.