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Lenders to Franchise Group, the firm at the epicenter of B. Riley Financial’s (NASDAQ:RILY) issues, agreed to give the firm a short reprieve to come up with a plan for its $1.5 billion in debt. B. Riley shares plummeted 24%.
A group of first-lien debt holders agreed to waive some covenants in Franchise Group’s credit agreement, according to a Bloomberg report on Thursday, which cited people familiar with the matter. The reprieve will give the firm until mid-September to deliver a business plan and restructuring proposal.
Second-lien and holding company lenders agreed to defer cash interest on their debt until Oct. 30, according to the report.
Shares of B. Riley plunged 24% on Thursday, erasing almost half of the 46% increase on Wednesday when Bloomberg reported that Oaktree Capital is in discussions to purchase a majority stake in two businesses.
B Riley (RILY) shares have plunged 63% since last Monday after the firm suspended its dividend and after a report that the Securities and Exchange Commission is looking into whether B. Riley (RILY) properly disclosed risks associated with some of its assets.
