The GEO Group Closes Previously Announced Transactions to Address Its Debt Maturities and Strengthen Its Capital Structure
August 22 2022 - 6:00AM
Business Wire
The GEO Group, Inc. (NYSE: GEO) (“GEO” or the “Company”)
announced today that on Friday, August 19, 2022, the Company
successfully closed the previously announced transactions (the
“Transactions”) to comprehensively address the substantial majority
of GEO’s outstanding debt. As previously disclosed, GEO’s new
outstanding debt maturities are approximately $125 million in 2023;
approximately $165 million in 2024; approximately $341 million in
2026; approximately $1.1 billion in 2027; and approximately $526
million in 2028. Following the Transactions, GEO has approximately
$200 million in domestic unrestricted cash and cash equivalents and
total liquidity of approximately $375 million.
George C. Zoley, Executive Chairman of GEO, said, “We are very
pleased to have successfully closed our comprehensive Transactions
to address the substantial majority of our outstanding debt
maturities. The Transactions stagger our debt maturities over a
longer period of time and significantly reduce our total recourse
debt due in 2023 and 2024 to less than $300 million, which we
expect to be able to fully repay with our available liquidity, the
expected future proceeds from the sale of certain non-core assets,
and our current free cash flow run rate.
We look forward to using most of our free cash flow towards
meeting our goal of reducing net recourse debt by $200-250 million
annually and decreasing our net leverage to below 3.5 times
Adjusted EBITDA by the end of 2023 and to below 3 times Adjusted
EBITDA by the end of 2024. We remain optimistic that our continued
focus on debt reduction and the deleveraging of our balance sheet
will have the potential to unlock additional equity value for our
shareholders.”
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified
government service provider, specializing in design, financing,
development, and support services for secure facilities, processing
centers, and community reentry centers in the United States,
Australia, South Africa, and the United Kingdom. GEO’s diversified
services include enhanced in-custody rehabilitation and
post-release support through the award-winning GEO Continuum of
Care®, secure transportation, electronic monitoring,
community-based programs, and correctional health and mental health
care. GEO’s worldwide operations include the ownership and/or
delivery of support services for 102 facilities totaling
approximately 82,000 beds, including idle facilities and projects
under development, with a workforce of up to approximately 18,000
employees.
Use of forward-looking statements
This news release may contain “forward-looking statements”
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and the U.S. Private Securities Litigation Reform
Act of 1995. Readers are cautioned not to place undue reliance on
these forward-looking statements and any such forward-looking
statements are qualified in their entirety by reference to the
following cautionary statements. All forward-looking statements
speak only as of the date of this news release and are based on
current expectations and involve a number of assumptions, risks and
uncertainties that could cause the actual results to differ
materially from such forward-looking statements, including our
ability to repay debt due in 2023 and 2024, our ability to reduce
net recourse debt by $200 million to $250 million annually over the
next two years, our ability to decrease net leverage at the
anticipated rate over the next two years, and our ability to
successfully close on the expected sale of certain non-core assets
on the anticipated timeline or at all. Readers are strongly
encouraged to read the full cautionary statements contained in
GEO’s filings with the SEC, including the risk factors set forth in
the Registration Statement on Form S-4, as amended, including a
prospectus and consent solicitation statement forming a part
thereof, the Company filed with the SEC. GEO disclaims any
obligation to update or revise any forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20220821005021/en/
Pablo E. Paez 1-866-301-4436 Executive Vice President, Corporate
Relations www.geogroup.com
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