- MSP Recovery (MSPR, Financial) to reduce over $1.2 billion in corporate guaranteed debt.
- Company secures $9.75 million in bridge funding and $25 million in working capital for a New Servicer entity.
- Virage Capital to acquire a 43% equity stake in MSPR.
MSP Recovery, Inc. (MSPR) has outlined a strategic restructuring plan intended to enhance financial stability and operational growth, while significantly reducing debt. The company has entered into agreements with Hazel Partners Holdings and Virage Capital Management to address its financial challenges.
Key aspects of the plan include a reduction of over $1.2 billion in corporate guaranteed debt, offering crucial relief to the company's balance sheet. As part of the restructuring, MSPR will gain access to a $9.75 million bridge funding facility, with $6.5 million available through July 2025. Additionally, the company will have up to $25 million in working capital targeted for a New Servicer entity.
Virage Capital Management will receive a substantial 43% equity stake in exchange for waiving claims, aligning interests, and releasing liens valued at approximately $1.2 billion. Furthermore, the restructuring involves converting approximately $144 million of principals' debt into equity, which is expected to dilute current shareholders.
A major component of the restructuring is the establishment of a new subsidiary, the New Servicer, which will operate independently and focus on enhancing recovery services using MSPR's proprietary data systems. This new structure is anticipated to reduce annual operational costs by $5.6 million.
The anticipated closing date for these transactions is April 30, 2025, contingent upon final agreements, regulatory endorsements, and other prerequisites. By extending debt maturities to November 2026, this move provides MSPR significant flexibility to focus on its core business of pursuing recoveries under the MSP laws.
