CEVA Group Plc Announces Final Results and Expected Successful Completion of Private Exchange Offers, Recapitalization of its Balance Sheet and New Capital Raise

  • Transaction Strengthens Balance Sheet by Eliminating Approximately €1.3 Billion of Consolidated Net Debt
  • Reduces Annual Cash Interest Costs by over €130 Million; Approx 50%
  • Provides Over €230 Million of New Capital Infusion for Investment in the Company’s Business Plan

CEVA125London, UK – 2 May 2013 – CEVA Group Plc (“CEVA” or the “Company”), one of the world’s leading non-asset based supply chain management companies, announced today the final results and expected successful completion of the previously announced private exchange offers (the “Exchange Offers”) and consent solicitations (the “Consent Solicitations”) for CEVA’s debt securities made pursuant to a Confidential Offering Memorandum, Consent Solicitation and Disclosure Statement dated 3 April 2013 (the “Offering Memorandum”). The Exchange Offers expired at 5:00 p.m., New York City time, on Wednesday, 1 May, 2013.  CEVA expects that the closing of the Exchange Offers will occur on 2 May 2013.

The Exchange Offers and the Consent Solicitations were conducted in connection with CEVA’s previously announced financial recapitalization plan to reduce substantially CEVA’s overall debt and interest costs, as well as increase liquidity and strengthen its capital structure (the “Recapitalization”).  The Recapitalization will enable CEVA to better serve its customers, accelerate its growth throughout the world and fund the development of new supply chain products and services. Through the Recapitalization, the Company has reduced its consolidated net debt by approximately €1.3 billion, reduced its cash interest expense by over €130 million and the Company has received cumulative new capital commitments of over €230 million for investment in its business plan.

“We are pleased to be successfully completing the Recapitalization and are appreciative of the support of our creditors in this effort. CEVA is now a much stronger competitor in the Supply Chain Industry and we look forward to growing with our customers around the world,” said Marvin O. Schlanger, CEVA’s Chief Executive Officer adding that “this is a transformational transaction that positions CEVA to better serve our customers and develop new supply chain solutions and services to meet their needs”.

As of 5:00 p.m.,  New York City time, on Wednesday, 1 May 2013, valid tenders had been received from (i) approximately $688.9 million in aggregate principal amount of CEVA’s 11.5% Junior Priority Secured Notes due 2018 (the “Second Lien Notes”), (ii) approximately $577.1 million in aggregate principal amount of CEVA’s 12.75% Senior Notes due 2020 (the “Senior Unsecured Notes”), (iii) approximately $113 million in aggregate principal amount of CEVA’s Senior Unsecured Bridge Loans (the “Bridge Loans”) and (iv) approximately €5.9 million in aggregate principal amount of CEVA’s 12% Second-Priority Senior Secured Notes due 2014 (the “Unexchanged Notes” and, together with the Senior Unsecured Notes and the Bridge Loans, the “Senior Unsecured Debt”). Accordingly, eligible holders of approximately 96% of the aggregate principal amount of the Second Lien Notes and Senior Unsecured Debt agreed to the terms of the Exchange Offers and exchanged their debt of CEVA for new preferred and common equity interests of Ceva Holdings LLC (“Holdings”), which is now the parent company of CEVA.

In addition, as part of the successful completion of the Recapitalization, Holdings received approximately $191 million of gross cash proceeds from the completion of the previously announced Rights Offering and an additional $28 million through other  private placements of new series A-1 convertible preferred equity interests of Holdings. A portion of the backstop commitment was funded through a mandatorily convertible loan made to an unaffiliated party in order to facilitate the closing of the Exchange Offers in a timely manner.  In addition to this immediate cash infusion, CEVA, at its option, has access to additional liquidity up to the U.S. dollar equivalent of €65 million through the financing commitment made by one of the Company’s largest institutional investors.

All of the conditions to the Exchange Offers for CEVA’s debt have been satisfied or waived by the Company and Holdings. As previously announced, all eligible holders of Second Lien Notes and Senior Unsecured Debt that validly tendered such debt prior to the expiration time received the consent fee/early tender fee and the exchange consideration and the supplemental indentures relating to the Second Lien Notes and the Senior Unsecured Notes consent solicitations have become operative.

Separately, Holdings announced today that the expiration time and withdrawal deadline in respect of the previously announced private exchange offer by Holdings (the “CIL Exchange Offer”) under the Offering Memorandum for certain debt instruments (the “CIL PIK Instruments”) of CIL Limited (formerly CEVA Investments Limited “CIL”), has been extended to midnight, New York City time, on Thursday, 16 May 2013 (as the same may be extended, as it relates to the CIL Exchange Offer only, the “Expiration Time”). Holdings also announced that the CIL Exchange Offer is being amended to (1) delete the condition that holders of 100% of the CIL PIK Instruments participate in the CIL Exchange Offer and (2) modify the consideration being offered to holders of CIL PIK Instruments so that holders who validly tender (and do not withdraw) their CIL PIK Instruments will receive their pro rata share of the aggregate CIL PIK Instruments Exchange Consideration (as defined in the Offering Memorandum) as if 100% of the holders of CIL PIK Instruments had participated in the CIL Exchange Offer (instead of their pro rata share based on the actual amount of CIL PIK Instruments tendered). Except as set forth above, all other terms of the CIL Exchange Offer remain the same.  As of 5:00 p.m, New York City time on 1 May 2013, no CIL PIK Instruments had been tendered in the CIL Exchange Offer.

The new securities offered in the Exchange Offers have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.

The Exchange Offers are being made in the United States only to holders of securities who are both “qualified institutional buyers” or institutional “accredited investors” and “U.S. persons” and outside the United States only to persons other than “U.S. persons” who are “non-U.S. qualified offerees” (in each case, as such terms are used in the letter of eligibility).  The Exchange Offers are being made only by, and pursuant to, the terms set forth in the Offering Memorandum.

CEVA – Making Business Flow

CEVA, one of the world’s leading non-asset based supply chain management companies, designs and implements industry leading solutions for large and medium-size national and multinational companies.  Approximately 50,000 employees in nearly 170 countries are dedicated to delivering effective and robust supply chain solutions across a variety of sectors where CEVA applies its operational expertise to provide best-in-class services across its integrated network.  For the year ending 31 December, 2012, the Company and its subsidiaries reported revenues of €7.2 billion.  For more information, please visit www.cevalogistics.com

For more information contact:

Mike Darcy
CEVA Media Relations
+31 622 482 604

Cautionary Statement

This news release is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful.  The offers to exchange the securities are only being made pursuant to the Offering Memorandum that CEVA is distributing to eligible holders of the securities.  The Exchange Offers are not being made to holders of the securities in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

This news release is directed only at persons (i) who are outside the United Kingdom or (ii) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (iii) who fall within Article 49(2)(a) to (d) of the Order or (iv) to whom this press release may otherwise be directed without contravention of section 21 of the Financial Services and Markets Act 2000 (all such persons together being referred to as “Relevant Persons”).  This news release is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons.  Any investment or investment activity to which this press release relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

Safe Harbor Statement

This news release may contain forward-looking statements.  These statements include, but are not limited to, discussions regarding industry outlook, the Company’s expectations regarding the performance of its business, its liquidity and capital resources, its guidance for 2013 and beyond, and the other non-historical statements.  These statements can be identified by the use of words such as “believes” “anticipates,” “expects,” “intends,” “plans,” “continues,” “estimates,” “predicts,” “projects,” “forecasts,” and similar expressions.  All forward-looking statements are based on management’s current expectations and beliefs only as of the date of this press release and, in addition to the assumptions specifically mentioned in the above paragraphs, there are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including the effect of local and national economic, credit and capital market conditions, a downturn in the industries in which we operate (including the automotive industry and the airfreight business), risks associated with the Company’s global operations, fluctuations and increases in fuel prices, the Company’s substantial indebtedness, restrictions contained in its debt agreements and risks that it will be unable to compete effectively.  Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s annual and quarterly reports, available on the Company’s website, which investors are strongly encouraged to review.  Should one or more of these risks or uncertainties materialize or the consequences of such a development worsen, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected.  CEVA disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

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