Sandvine Announces Comprehensive Restructuring Transaction as Part of Ongoing Business Realignment

Sandvine Corporation and certain of its affiliates and subsidiaries (“Sandvine” or the “Company”) today announced that it has commenced proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) in the Ontario Superior Court of Justice (Commercial List) and is in the process of commencing a companion recognition proceeding under Chapter 15 of Title 11 of the United States Code (“Chapter 15”) in the United States Bankruptcy Court for the Northern District of Texas (Dallas Division) in order to implement a comprehensive restructuring transaction.

On October 2, 2024, the Company entered into a Restructuring Support Agreement (“RSA”) with over 97% of its secured lenders, who are also current shareholders of the Company (“Investors”), to implement a transaction that would result in, among other things, the conversion of the Company’s legacy funded debt obligations into equity and the funding of the Company through a new super senior loan facility under which the Investors provide new money commitment in the amount of US$45 million (the “Investor Transaction”). The Investor Transaction provides a foundation for the Company’s long-term continuation as a market leader in the global telecommunications industry.

In connection with the CCAA proceedings, the Company will seek approval of a sales and investment solicitation process (SISP) pursuant to which the Investor Transaction will serve as the stalking horse bid and interested parties will be invited to submit superior offers. Consummation of the Investor Transaction or a superior proposal will be subject to court approval and other customary closing conditions. The Company will also seek court approval to convert the unfunded US$30 million commitments under the Investor Transaction into a debtor-in-possession facility to provide the Company with access to sufficient liquidity to meet its financial obligations during the duration of the restructuring proceedings.

The decision to enter into the RSA and commence restructuring proceedings was made after careful evaluation of the Company’s financial situation following business disruptions caused by the Company’s placement on the U.S. Department of Commerce’s Entity List following allegations of misuse of the Company’s products by certain customers. The Company is undergoing a comprehensive transformation and has taken significant steps to realign its operations and business model, commit to new leadership, and shift to exclusively serving customers, including many of the world’s largest telecommunications companies, in democratic jurisdictions. These restructuring proceedings are an important component of the Company’s ongoing business realignment, which seeks to position the business for long-term success.

The restructuring proceedings provide the Company with an opportunity to restructure its debt obligations in a protected and managed environment while ensuring an uninterrupted continuation of its operations, especially its customer support services, laying the foundation for Sandvine to further build on its position as a technology and market leader in the telecommunications industry. The overwhelming support from Sandvine’s existing Investors is indicative of the optimism regarding Sandvine’s future.

Sandvine leadership will remain responsible for ensuring continued day-to-day operations of the Company during the restructuring process, under the general oversight of the CCAA court-appointed monitor, KSV Restructuring Inc. (the “Monitor”). Information about Sandvine’s CCAA and Chapter 15 proceedings can be found at the Monitor’s website at: https://www.ksvadvisory.com/experience/case/sandvine.

The Company is committed to working closely with its stakeholders to minimize the impact of the restructuring process and to ensure that its creditors are treated fairly.

Advisors

GLC Advisors & Co., LLC and GLC Securities, LLC is acting as investment banker, and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Osler, Hoskin & Harcourt LLP are acting as United States and Canadian legal advisors to the Company, respectively.

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