Israeli hospitality company Selina (Nasdaq: SLNA), which listed on Wall Street at the end of 2022 with a market cap of $1.2 billion, through a SPAC merger, currently has a negligible market cap of just $21 million, having lost 99% of its value.
The company already announced several months ago that it was halting its geographic expansion and closing down loss-making properties. Selina is now striving to improve its balance sheet and has reported a debt settlement with bondholders and a new fundraising, which will dilute existing shareholders stakes as control of the company could pass into new hands and it could delist from Nasdaq.
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Selina operates hospitality properties worldwide targeting millennial and Gen Z travelers. The company was founded by CEO Rafael Museri and Daniel Rudasevski – both veterans of elite IDF units. Earlier this week Selina reported that it has raised $68 million from Osprey Investments, an affiliate of Global University Systems (GUS), a European higher education platform.
In June, Osprey invested $15.6 million in Selina, in debt that can be converted to shares. In the current agreement a further $20 million will go to shares in Selina and additional amounts in the future subject to meeting certain conditions. Osprey will be allowed to appoint four directors.
In April Museri and Rudasevski held a 37% stake in Selina but this will now be diluted by 75%-90% and leave them with a holding of just a few percent.
At the same time Selina reached a debt agreement with a majority of its bondholders. Last year Selina issued a convertible bond for $148 million with 6% annual interest payable every six months. The convertible price of the bond was $11.5, far from the current share price of just $0.19. As part of the debt settlement, the bondholders have agreed to postpone the repayment date by three years and convert some of the debt to shares, options and promissory notes now. The bondholders will also be able to appoint an independent director to the board.
Published by Globes, Israel business news – en.globes.co.il – on December 5, 2023.
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