Three days after notifying the Securities and Exchange Commission that Lazydays would be late filing its quarterly earnings report because of “significant and immediate liquidity challenges” creating “substantial doubt about its ability to continue as a going concern,” the RV dealer chain revealed numerous steps to recapitalize the company.
On Friday, Lazydays sold seven store locations to Camping World for $55.5 million, subject to conditions. Camping World provided Lazydays with a $10 million, nonrefundable deposit in exchange for 9.708 million shares of Lazydays’ stock.
Lazydays revealed various other agreements Friday, including selling an eighth dealership to another buyer for $8 million, subject to conditions. After the sales, Lazydays will operate 16 locations nationwide.
Lazydays CEO Ronald Fleming said, “Today marks a turning point for the trajectory of Lazydays…I am confident that as a nimbler organization with enhanced liquidity, Lazydays’ brightest days are ahead.”
Lazydays said the transactions, which include a comprehensive recapitalization and certain asset sales, will result in meaningful reductions in the company’s debt, interest and preferred stock dividend payments, substantial added cash to the balance sheet and an improvement in the business’ underlying earnings power.
Lazydays Chairman Robert DeVincenzi said, “Collectively, these transactions represent a critical step in the revitalization of Lazydays’ business and demonstrate the confidence that investors have in our long-term success.”
The company’s transactions include:
- Closing a $30 millioncommon equity private investment in public equity (PIPE) at $1.03 per share with clients of Alta Fundamental Advisers and Coliseum Capital Management (known as PIPE investors).
- Launching a $25 millionrights offering at $1.03 per share, allowing all Lazydays common stockholders (other than the PIPE investors and Camping World) to purchase common stock at the same price as PIPE investors, subject to the U.S. Securities and Exchange Commission declaring a registration statement on Form S-1 effective.
- Exchanging all outstanding convertible preferred stock for common stock at $1.03per share, eliminating preferred stock liquidation preference, preferred dividend requirement and other preferred stockholder rights, subject to conditions.
- An amended credit facility with M&T Bank, providing significant financial flexibility.
After the agreements, Lazydays said the company is expected to have $35 million cash on the balance sheet, $61 million in debt (excluding floor plan financings) and 119.5 million shares of common stock outstanding.
