Exela has received some questions from investors regarding STS and the recently announced merger and thought it makes sense to post them with answers for all to see. Please note that every answer is subject to change, but we will do our best to keep investors updated. We look forward to communicating with you further and do recommend communication with Exela via SpeakUp found here, https://corporate.gospeakup.com/CSpeakupApp/stkholdersnup.html.
Q: What is STS?
A: Exela created XCV-STS, LLC to “Serve the Shareholders.” STS holds assets that we have set aside to benefit shareholders.
Q: Does STS currently hold any assets?
A: On August 3, 2022, Exela announced that it holds $70 million of face value 2026 notes purchased at a discount.
Q: Who receives the coupon payment that is due on these notes?
A: STS is entitled to receive the coupon. When STS receives the coupon, it may use the coupon for the benefit of the Exela shareholders including but not limited to a dividend or used as part of a share buyback program, subject to applicable laws and relevant approvals.
Q: Will you retire these notes?
A: STS currently plans to continue to hold these notes to maturity. However, it may also sell them earlier for cash, which could then be employed by STS as described above.
Q: What was announced on October 10, 2022?
A: Exela and CF Acquisition Corp. VIII announced the next stage in the public listing of Exela’s European business, called XBP Europe. The press release is listed here, https://investors.exelatech.com/news-releases/news-release-details/exela-technologies-incs-european-business-go-public-through
Q: What will XELA holders receive when the transaction closes?
A: Exela’s subsidiary, the seller, will receive shares of the standalone public company for its shares of XBP Europe. The enterprise value of XBP Europe at today’s valuation is approximately $220 million. XBP Europe currently generates ~$200 million in revenue annually. More details can be found here, http://exelatechnologies.gcs-web.com/static-files/7a68cfc1-fec6-4ba1-a748-becbb83ab336
Q: Who will own the publicly traded entity?
A: Exela will indirectly own the vast majority of the shares in the entity which will be publicly listed on the Nasdaq.
Q: Why are you taking XBP Europe public?
A: We believe that Exela is undervalued and expect this transaction to benefit Exela shareholders to help realize some of the real value of Exela.
Q: When will we learn more about the transaction?
A: We will provide updates as we make progress per guidelines mandated by the SEC.
Q: Will the new combined company have debt?
A: While we don’t have specifics until the close of the transaction. we expect the new combined company to have cash, some debt and working capital lines used for the growth of business.
Q: Will Exela Technologies Inc. receive cash in this transaction?
A: Exela’s subsidiary will receive shares in this transaction and we will provide further plans for these shares as information becomes available.
Information for holders, prospective investors, market makers affiliated with any initial purchaser of the 11.500% First-Priority Senior Secured Notes due 2026 issued by Exela Intermediate, LLC, and securities analysts, please see the tab 4a in the 3Q Factsheet, https://investors.exelatech.com/financial-information/quarterly-results