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Bird Global (OTC:BRDS) has filed for Chapter 11 bankruptcy protection to undergo restructuring to strengthen its balance sheet, just two years after the electric scooter rental company went public through a SPAC merger.
Apollo Global (APO) unit MidCap Financial and certain existing lenders will provide $25M in new debtor-in-possession financing. The company listed assets and liabilities of $100M-$500M in a court filing.
Bird (OTC:BRDS) entered into a stalking horse deal with existing lenders, which effectively sets a floor for the company’s value. The bid is subject to better offers, aimed at maximizing value for stakeholders. The sale process is expected to be completed in the next 90-120 days.
Bird (OTC:BRDS) will operate as usual during this process and maintain the same service for its riders. Bird Canada and Bird Europe are not part of the bankruptcy filing and will continue operating as normal.
Shares of Bird (OTC:BRDS) have lost ~92% in value YTD and ~100% since its trading debut.
The company has been battling a slump in sales, which has eaten into its profits despite aggressive cost cuts. Bird (OTC:BRDS) last month flagged substantial doubt about its ability to continue as a going concern based on recurring losses and negative cash flow from operations for the nine months ended September 30.
“Bird’s (OTC:BRDS) go-public story has become a classic tale of how SPACs became the harbinger of wealth destruction against initially buoyant expectations of growth,” SA analyst Pacifica Yield warned back in June.
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