Debt
Lilium NV plummets to the ground after gov declines to rescue it mid-air
In our second “falling to earth” headline metaphor of the day, Lilium NV will be shuttering its two subsidiaries after it failed to raise the 100mm in loans it needed to stay afloat. Layoffs of 1,000 are inbound as well. The hail mary that Lilium hoped for was the involvement of the German government, but with that window now closed, any hopes of raising the loans are now closed.
Tech Crunch - Kirsten Korosec Electric aircraft startup Lilium has run out of money
Tipranks - Steve Anderson Lilium (NASDAQ:LILM) Stock Plunges 58% on Insolvency News
Spirit Airlines continues its tailspin
Making more moves to stave off bankruptcy after the courts refused an acquisition by JetBlue, Spirit is set to sell 23 planes and implement a cost-cutting (layoff) round. The cutting will save it $80mm & the planes will fetch ~$519mm.
As dire as things appear, Inc notes that Frontier might be exploring making a new bid for the company. Could this one be saved? Will the government allow it to sell to someone else? Or will it continue toward its inevitable impact with the ground?
Mnuchin & Liberty Strategic Capital come to the rescue of NYCB
The news on NYCB just keeps coming today, and it appears as if it’s fundraising round was successful. The cash-strapped bank has just issued a press release and it appears Steve Mnuchin and a consortium consisting of Liberty Strategic Capital, Hudson Bay Capital and Reverence Capital Partners has come to the rescue with a $1bil cash infusion.
Some terms of the deal include:
- Reduction of the board size to 9-members (from 15 according to its website)
- Addition of Mnuchin and Joseph Otting to the board
- Otting will become CEO (replacing Alessandro DiNello who was installed last week)
Shares have rebounded and are now up ~5% on the day, which has to help offset some of Jenny Harrington’s losses on the stock.
NYCB stock tanks after WSJ report
The WSJ is reporting that New York Community Bancorp (NYCB) is on a desperate quest for equity capital as it battles to regain investor confidence amidst a backdrop of escalating troubles. The once-reliable regional bank is now grappling with a mix of challenges, including real-estate loan losses, and a drastic 70% fall in its stock price since January.
The crisis at NYCB took center stage when it acknowledged problems in its commercial real-estate portfolio earlier this year, resulting in a fourth-quarter loss and a dividend cut. Matters worsened last week as the bank disclosed “material weaknesses” in its loan assessment and monitoring processes, prompting a series of credit downgrades and a new Executive Chairman, Thomas Cangemi.
SoFi issuing $750mm in new debt
Fintech company SoFi is adding to its $5 billion in debt by issuing $750 million more in convertible notes. The stock is taking a 15% haircut on the news that by 2029 there might be further dilution of the stock due to these notes.
The company recently had a profitable quarter and with interest rates high, we are left wondering why they are feeling light on cash.
