NEW YORK - LivePerson, Inc. (NASDAQ:LPSN), a global leader in digital customer conversations, disclosed today an agreement with Lynrock Lake Master Fund LP to restructure its debt. The deal includes exchanging approximately $146 million of its 2026 Convertible Senior Notes for $100 million of new 2029 Convertible Senior Secured Notes.
This transaction, which is expected to close by the end of May, also involves a commitment from Lynrock to provide an additional $100 million in capital through the purchase of more 2029 notes. The first half of this sum will be acquired alongside the debt exchange, with the option for LivePerson to request the remaining $50 million within the subsequent six months.
John Collins, CFO and COO of LivePerson, stated that this move is aimed at leveraging the current market discount on their 2026 notes, extending debt maturity, and securing fresh capital for further debt reduction. He emphasized that the strengthened capital structure positions the company to better serve customers and partners while enhancing shareholder value.
In conjunction with the exchange, Lynrock will receive 10-year warrants for 11% of LivePerson's common stock, exercisable at $0.75 per share. The new notes will be secured by certain subsidiaries of LivePerson.
Further details regarding the exchange and purchase agreement will be provided in an 8-K filing with the Securities and Exchange Commission.
LivePerson's Conversational Cloud platform is utilized by major brands to facilitate conversational interactions with consumers. The company boasts nearly a billion such interactions monthly, harnessing data and AI solutions to improve contact center operations and customer experiences.
The press release includes forward-looking statements under the Private Securities Litigation Reform Act of 1995, cautioning that actual outcomes could differ materially from expectations due to various risks. These include the company's execution of business and product plans and other risk factors detailed in their recent SEC filings.
Investors and stakeholders are advised that the information is based on a press release statement from LivePerson, Inc.
InvestingPro Insights
As LivePerson, Inc. (NASDAQ:LPSN) moves to restructure its debt and strengthen its financial position, a look at the company's recent performance metrics from InvestingPro provides additional context for investors. With a market capitalization of $58.53 million, the company's financial health is under scrutiny, particularly given the significant debt burden it operates under and the challenges it may face in making interest payments on its debt.
InvestingPro Data shows that LivePerson has experienced a revenue decline of 22.91% over the last twelve months as of Q1 2024, which aligns with analysts' anticipation of a sales decline in the current year. The company's P/E ratio stands at -0.63, reflecting analysts' consensus that the company will not be profitable this year. This is further evidenced by the price of LivePerson's stock, which has decreased significantly, with a 1 Year Price Total Return of -86.76%.
InvestingPro Tips highlight the company's volatility, with the stock price movements being quite erratic. This high price volatility is a critical factor for investors to consider, especially in light of the recent debt restructuring agreement. Moreover, LivePerson has been quickly burning through cash, which may raise concerns about its long-term financial sustainability.
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