Eros STX Global Corporation (EROS) - Get Eros International PLC Class A Report, 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") (EROS) - Get Eros International PLC Class A Report 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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