US telecoms software vendor Mavenir has come to a recapitalization arrangement with its main investor, Siris, and is taking a step back from its foray into Open RAN.
Corporate debt is an arcane and murky world in which niche language and euphemism are generally preferred to plain speaking. Hoping to draw a line under a lengthy period of speculation about its finances, Mavenir has announced a ‘debt recapitalization’ with its existing lenders. They’re not named in the announcement, but no less than $1.3 billion of debt has been has apparently been eliminated, which is a neat trick if you can manage it.
Investopedia defines ‘recapitalization’ as: “the process of restructuring a company's debt and equity mix to stabilize its capital structure often through the exchange of one form of financing for another.” In this case, given the absence of any other named financial partners, it’s hard to conclude this deal represents anything other than a debt-for-equity swap with Siris to the tune of $1.3 billion.
