B. Riley Financial (RILY) shares experienced a significant surge on Monday, driven by the company’s announcement of strategic and financing initiatives designed to bolster its financial standing. These initiatives include the negotiation of a sale for a majority stake in its Great American Group subsidiary, valued at approximately $380 million, alongside a $236 million debt financing plan for its brands portfolio.
The sale of the majority stake in Great American Group is expected to generate substantial cash proceeds for B. Riley. Coupled with the debt financing initiative, these transactions are projected to yield around $410 million in gross cash proceeds. B. Riley plans to strategically deploy these proceeds to reduce its senior secured debt to approximately $125 million by the end of 2024.
Specifically, B. Riley is currently in negotiations to sell a 53% stake in its Great American Group business. The company has also entered into a non-binding agreement for $236 million in debt financing for its brands portfolio. This debt financing will be utilized to further reduce its senior secured debt, specifically targeting the Nomura Senior Secured Credit Agreement.
The combined impact of these transactions is anticipated to have a positive effect on B. Riley’s financial position, enabling the company to invest more effectively in its core business operations. Following the announcement, B. Riley shares experienced a notable surge, rising by 11.1% to $5.97 according to Benzinga Pro. These strategic moves signal B. Riley’s commitment to enhancing its financial stability and driving future growth.
