Eros STX Global Corporation (NYSE:EROS), or “The Company”,
announced on July 30, 2020 that its merger with STX Entertainment
and $110 million of equity financing transactions had been
completed. The Company issued a total of 35,135,334 of its A
Ordinary Shares in the equity financings for total proceeds of
$110,387,500, for an average price of $3.14 per Eros A Ordinary
Share, which represents a 60% premium over the closing price of
$1.96 for Eros A Ordinary Shares on April 16, 2020, the day before
Eros publicly announced its entry into the Merger Agreement.
The Company has agreed, pursuant to the Merger Agreement and the
PIPE Subscription Agreement, in each case as described in the SEC
filings of the Company, to consummate an additional $15 million of
equity financing within 90 days following the closing date of the
merger, bringing the total equity financing amount to $125 million.
In addition to the $125 million total equity investment, the
company’s liquidity position and balance sheet are further
strengthened by a revamped $350 million JP Morgan-led credit
facility and a strong credit profile.
The Company filed a report on Form 6-K with the SEC today
describing the merger, the equity financings, the composition of
the Company’s Board of Directors and other matters, which filing
can be accessed through the Company’s website here. The description
of the merger and equity financings contained herein are qualified
in their entirety by the description thereof contained in such
report on Form 6-K.
Contingent Value Rights
Pursuant to the merger agreement, Eros International Plc issued
contractual contingent value rights (“CVRs”) to the former
stockholders of STX Entertainment in the merger in exchange for the
preferred stock of STX. The CVRs will be settled on a date between
75 days and six months after the July 30, 2020 closing date of the
merger, by issuance of 171,912,291 of the Company’s A Ordinary
Shares, which number of shares was calculated in accordance with
the terms of the CVRs based on the number of shares outstanding or
issuable pursuant to equity awards as of immediately prior to the
closing of the merger. Giving effect to the equity financings, the
Company had outstanding as of immediately following the closing of
the merger 179,928,179 A Ordinary Shares and 21,700,418 B Ordinary
Shares, for total shares outstanding of 373,540,888 after giving
effect to the shares to be issued upon settlement of the CVRs.
Further information about the merger, the equity financing, the
composition of the Company’s Board of Directors, including new
Director biographies, as well as copies of the Investors’ Rights
Agreement, Registration Rights Agreement and the Company’s Amended
Articles of Association can be found in the above referenced Form
6-K filed with the SEC.
About Eros STX Global
Corporation
Eros STX Global Corporation, (“Eros STX” or “The Company”)
(NYSE:EROS) is a global entertainment company that acquires,
co-produces and distributes films, digital content & music to
consumers around the world across multiple formats such as
theatrical, television and OTT digital media streaming. In July
2020 Eros International Plc, the largest Indian OTT player and
premiere studio, merged with STX Entertainment, one of Hollywood’s
fastest-growing independent media companies, creating an
entertainment powerhouse with a presence in over 150 countries.
Eros STX delivers star-driven premium feature film and episodic
content across a multitude of platforms at the intersection of the
world's most dynamic and fastest growing global markets, including
the United States, India, Middle-East and China. The Company’s OTT
platform, Eros Now, has rights to over 12,000 films across Hindi
and regional languages, and had 196.8 million registered users and
29.3 million paying subscribers as of March 31, 2020. For further
information, please visit Erosplc.com or STXentertainment.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information provided in this communication includes
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, and
such statements are subject to the safe harbors created thereby.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as “approximately,”
“anticipate,” “believe,” “estimate,” “continue,” “could,” “expect,”
“future,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “seek,” “should,” “will” and similar expressions. Those
statements include, among other things, the discussions of the
Company’s business strategy and expectations concerning its and the
Company’s market position, future operations, margins,
profitability, liquidity and capital resources, tax assessment
orders and future capital expenditures. All such forward-looking
statements are subject to risks and uncertainties that may cause
actual results to differ materially from those that the Company is
expecting, including, without limitation: the Company’s ability to
successfully and cost-effectively source film content; the
Company’s ability to achieve the desired growth rate of Eros Now,
its digital over-the-top (“OTT”)
entertainment service; the Company’s ability to maintain or raise
sufficient capital; delays, cost overruns, cancellation or
abandonment of the completion or release of the Company’s films;
the Company’s ability to predict the popularity of its films, or
changing consumer tastes; the Company’s ability to maintain
existing rights, and to acquire new rights, to film content; the
Company’s ability to successfully defend any future class action
lawsuits it is a party to in the U.S.; anonymous letters to
regulators or business associates or anonymous allegations on
social media regarding the Company’s business practices, accounting
practices and/or officers and directors; the Company’s dependence
on the Indian box office success of its Hindi and high budget Tamil
and Telugu films; the Company’s ability to recoup the full amount
of box office revenues to which it is entitled due to
underreporting of box office receipts by theater operators; the
Company’s dependence on its relationships with theater operators
and other industry participants to exploit the Company’s film
content; the Company’s ability to mitigate risks relating to
distribution and collection in international markets; fluctuation
in the value of the Indian rupee against foreign currencies; the
Company’s ability to compete in the Indian film industry; the
Company’s ability to compete with other forms of entertainment; the
Company’s ability to combat piracy and to protect its intellectual
property; the Company’s ability to maintain an effective system of
internal control over financial reporting; contingent liabilities
that may materialize, the Company’s exposure to liabilities on
account of unfavorable judgments/decisions in relation to legal
proceedings involving the Company or its subsidiaries and certain
of its directors and officers; the Company’s ability to
successfully respond to technological changes; regulatory changes
in the Indian film industry and the Company’s ability to respond to
them; the Company’s ability to satisfy debt obligations, fund
working capital and pay dividends; the monetary and fiscal policies
of India and other countries around the world, inflation,
deflation, unanticipated turbulence in interest rates, foreign
exchange rates, equity prices or other rates or prices; the
Company’s ability to address the risks associated with acquisition
opportunities; risks that the ongoing novel coronavirus pandemic
and spread of COVID-19, and related public health measures in India
and elsewhere, may have material adverse effects on the Company’s
business, financial position, results of operations and/or cash
flows; challenges, disruptions and costs of closing the Merger and
related transactions, integrating the Eros and STX businesses and
achieving anticipated synergies, and the risk that such synergies
will take longer to realize than expected or may not be realized in
whole or in part; the amount of any costs, fees, expenses,
impairments and charges related to the Merger and related
transactions; uncertainty as to the effects of the consummation of
the Merger and related transactions on the market price of the
Company’s A ordinary shares and/or the Company’s financial
performance; and uncertainty as to the long-term value of the
Company’s ordinary shares.
The forward-looking statements contained in this communication
are based on historical performance and management’s current plans,
estimates and expectations in light of information currently
available and are subject to uncertainty and changes in
circumstances. There can be no assurance that future developments
affecting the Company will be those that it has anticipated. Actual
results may differ materially from these expectations due to
changes in global, regional or local political, economic, business,
competitive, market, regulatory and other factors, many of which
are beyond the Company’s control. Should one or more of these risks
or uncertainties materialize or should any of the Company’s
assumptions prove to be incorrect, the Company’s actual results may
vary in material respects from what the Company may have expressed
or implied by these forward-looking statements. The Company
cautions that you should not place undue reliance on any of its
forward-looking statements. Any forward-looking statement made by
the Company in this communication speaks only as of the date on
which the Company makes it. Factors or events that could cause the
Company’s actual results to differ may emerge from time to time,
and it is not possible for the Company to predict all of them. The
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20200804005555/en/
Mark Carbeck Chief Corporate and Strategy Officer Eros STX
Global Corporation mark.carbeck@erosintl.com
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