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Investing.com -- Shares of B. Riley Financial, Inc. (NASDAQ: RILY) soared 20% following the announcement of a new $160 million debt financing deal with Oaktree and the company’s return to compliance with Nasdaq’s listing requirements. The positive response from the market adds to a significant 36% rise in the company’s stock the previous day.
The Los Angeles-based diversified financial services company disclosed the senior secured debt facility provided by funds managed by Oaktree Capital Management, L.P. This move allows B. Riley to retire its previous debt under the Nomura Senior Secured Credit Agreement and allocate funds for working capital purposes. Part of the capital is directed towards B. Riley’s investment in the liquidation of JOANN, the fabric and crafts retailer.
B. Riley’s involvement in the liquidation of JOANN, through its 44% ownership in GA Group, is significant as GA Group was recently appointed as the exclusive agent to monetize JOANN’s assets following the retailer’s bankruptcy. The liquidation is one of the largest in GA Group’s history, involving approximately $2 billion in retail inventory.
Chairman and Co-Chief Executive Officer Bryant Riley highlighted the strategic benefits of the new credit agreement, noting its role in providing financial flexibility and supporting the company’s initiatives. He emphasized the early success of their partnership with Oaktree and the potential upside from the JOANN liquidation and B. Riley’s equity stake in GA Group.
The new debt facility comes with an interest rate pegged to the three-month SOFR plus 8.00%, and the deal includes the issuance of warrants to Oaktree for the purchase of common shares at a premium. This financial restructuring coincides with B. Riley’s regained compliance with Nasdaq’s Listing Rule 5250(c)(1), ensuring timely filing of periodic reports with the SEC.
Investors and analysts can look forward to more detailed financial information when B. Riley reports its preliminary full-year 2024 results on Monday, March 3, after market close. The company will also host a conference call and Q&A session on the same day to discuss the results and provide further insights into its financial strategies and outlook.
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