SCHEDULE: Exela Affiliates Boost XBP Global Holdings Stake Post-Restructuring

Exela Technologies, Inc. and its affiliates have significantly increased their beneficial ownership in XBP Global Holdings, Inc. to 28.97% following the completion of restructuring transactions.

Summary

• Exela Technologies, Inc. and its affiliates (XCV-STS, LLC and GP 3XCV LLC), along with Executive Chairman Par Chadha, now beneficially own 36,027,240 shares of XBP Global Holdings, Inc. Common Stock and warrants.
• This represents 28.97% of XBP Global Holdings, Inc.'s outstanding common stock, based on 117,715,369 shares outstanding as of July 29, 2025.
• The acquisition stems from Restructuring Transactions completed on July 29, 2025, following Chapter 11 bankruptcy cases of certain Exela subsidiaries/affiliates.
• The transactions involved the equitization or exchange of allowed claims related to the Debtors' 11.5% secured notes due April and July 2026.
• Exela's indirect wholly-owned subsidiaries, XCV-STS and GP 3XCV, received 27,037,562 shares of common stock and warrants for 6,632,418 shares.
• GP 3XCV also acquired an additional 1,680,193 shares of common stock through a Membership Interest Purchase Agreement.
• Par Chadha directly received 1,228,288 shares for Allowed Notes Claims and previously 1,128,972 shares for director service.

Sentiment

Score: 6

Explanation: The filing reports the successful completion of a complex restructuring process, which resolves significant financial uncertainty stemming from Chapter 11 bankruptcy cases. While the underlying cause was distress, the resolution and the acquisition of a substantial equity stake by Exela and its controlling shareholder are positive steps towards stability and potential future value creation. The Transaction Tax Liability is a known obligation but part of the overall resolution.

Positives

• Successful completion of the Restructuring Transactions, resolving Chapter 11 bankruptcy cases for certain Exela subsidiaries/affiliates.
• Exela and its affiliates secured a significant beneficial ownership stake of 27.08% in XBP Global Holdings, Inc.
• Par Chadha, Executive Chairman of Exela, increased his beneficial ownership to 28.97% in XBP Global Holdings, Inc., consolidating control.
• Registration rights were granted to Exela's subsidiaries and other holders, facilitating potential future liquidity for the acquired shares.

Negatives

• The underlying context of the transaction is the Chapter 11 bankruptcy of certain Exela subsidiaries/affiliates, indicating past financial distress.
• Consenting ETI Parties (Exela, XCV-STS, GP 3XCV) are obligated to pay the first $15 million and any amount exceeding $25 million of the Transaction Tax Liability arising from the restructuring.
• Shares of XBP Common Stock received by Consenting ETI Parties are pledged to secure their obligations under the Tax Funding Agreement.

Risks

• Exposure to Transaction Tax Liability, with Exela and its affiliates responsible for the first $15 million and any amount over $25 million.
• The pledge of XBP Common Stock to secure the Tax Funding Agreement obligations could impact the flexibility of these shares.
• Potential for dilution if the Transaction Tax Liability is satisfied through the issuance of new XBP Common Stock.

Future Outlook

The completion of the restructuring provides a clearer path forward for XBP Global Holdings, Inc. and its relationship with Exela. The Registration Rights Agreement suggests a future potential for the resale of the acquired shares, while the Tax Funding Agreement outlines ongoing financial obligations related to the restructuring's tax implications.

Management Comments

• "Upon the completion of the Restructuring Transactions, Exela beneficially owns 27.08% of XBP Common Stock, based on 117,715,369 shares of XBP Common Stock outstanding as of July 29, 2025 and giving effect to 6,632,418 XBP Warrant Shares beneficially owned by Exela through XCV-STS and GP 3XCV."
• "Upon the completion of the Restructuring Transactions, Mr. Chadha beneficially owns, primarily through Exela, 28.97% of XBP Common Stock, based on 117,715,369 shares of XBP Common Stock outstanding as of July 29, 2025 and giving effect to 6,632,418 XBP Warrant Shares beneficially owned by Exela."

Industry Context

This filing reflects the complex financial restructuring often seen in the business process management sector, particularly for companies with diverse and sometimes underperforming subsidiaries. The equitization of debt through bankruptcy proceedings is a common mechanism to recapitalize distressed entities and re-establish a viable capital structure, allowing the parent company to retain a significant stake in the reorganized entity.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results.
• The restructuring is highly specific to the financial situation of Exela's former subsidiaries/affiliates and the terms negotiated with their creditors.
• The percentage of ownership acquired (28.97% for Par Chadha and affiliates) is a substantial controlling interest, which is a common outcome in debt-for-equity swaps during reorganizations, allowing original stakeholders to maintain influence.

Management Changes

Corporate Governance

Legal Proceedings

• Chapter 11 bankruptcy cases (Case No 25-90023) filed by certain direct or indirect subsidiaries of Exela and affiliates of the Issuer in the United States Bankruptcy Court for the Southern District of Texas. These cases led to the Restructuring Transactions.

Related Party Transactions

• The entire Restructuring Transaction involves Exela Technologies, Inc. and its indirect, wholly-owned subsidiaries (XCV-STS, LLC and GP 3XCV LLC) acquiring a significant stake in XBP Global Holdings, Inc., which was an affiliate of the Issuer.
• Par Chadha, Executive Chairman and controlling shareholder of Exela, also directly acquired shares in XBP Global Holdings, Inc. and previously received shares for his service as a director of XBP.
• The Plan Support Agreement, Tax Funding Agreement, and Registration Rights Agreement are between these related parties.

Stakeholder Impact

• Shareholders of XBP Global Holdings, Inc.: The restructuring resulted in a significant change in the ownership structure, with Exela and its affiliates becoming major beneficial owners. Existing shareholders (if any prior to the restructuring) would have been impacted by the equitization of debt. New shareholders (former 2026 Notes holders) received equity.
• Creditors (2026 Notes holders): Their allowed claims were equitized or exchanged for equity in XBP Global Holdings, Inc. as part of the Plan.
• Shareholders of Exela Technologies, Inc.: The company's financial position is impacted by the acquisition of the XBP stake and the assumption of the Transaction Tax Liability.
• Employees of XBP Global Holdings, Inc.: The successful completion of the restructuring provides stability for the company's operations, which can positively impact employees.

Next Steps

• Payment of Transaction Tax Liability by Consenting ETI Parties, potentially through purchase of rollover exit notes or exchange for newly issued XBP Common Stock.
• Potential resale of XBP Common Stock and XBP Warrant Shares by Exela's subsidiaries and other holders, subject to conditions and thresholds, as per the Registration Rights Agreement.

Key Dates

Keywords

XBP Global Holdings, Exela Technologies, Schedule 13D, Beneficial Ownership, Restructuring, Bankruptcy, Chapter 11, Corporate Governance, Warrants, Equity, Financial Reporting, SEC Filing, Par Chadha, XBP Europe Holdings