Steel Partners Proposed Acquisition of Steel Connect, No CoC

Analyzing the Steel Partners proposed acquisition of Steel Connect, our Americas Covenants team dives deep into the Steel Connect OpCo debt documents and the potential for no change of control under the documents.  Steel Connect’s two subsidiaries, ModusLink Corp. and IWCO Direct Holdings currently sit with $12.5M and $25M revolvers respectively where IWCO also has a $393M term loan at its subsidiary Instant Web LLC. 

Steel Partners previously owned 48.7% of Steel Connect, but in Nov. 2020, the Steel Partners proposed acquisition, which was non-binding, was sent to the board of directors at Steel Connect to buy out the rest of the common stock not already owned by Steel Partners and their affiliates. These conversations brought a great deal of focus on the Steel Connect unsecured convertible notes as well as the OpCo debt for ModusLink’s ABL revolver and Instant Web’s RCF and term loan. Read our Americas Covenants full covenants analysis of the situation here: https://reorg.com/steel-connect-debt-documents/