B.Riley Financial Shares Were Up Today: What's Going On?

Zinger Key Points

B. Riley Financial secured a $160 million debt facility from Oaktree Capital Management, using $118 million to retire existing debt.
B. Riley, through its 44% stake in GA Group, will manage the liquidation of JOANN’s $2 billion in inventory.
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B. Riley Financial, Inc. RILY shares are trading higher Thursday after the company announced a $160 million senior secured debt facility provided by funds managed by Oaktree Capital Management.

What To Know: The company used approximately $118 million of the loan to retire its existing debt under the Nomura Senior Secured Credit Agreement. The remaining funds will be used for general working capital, including up to $35 million for a joint venture overseeing the liquidation of JOANN. The fabric and crafts retailer is closing all 790 stores nationwide.

GA Group, in which B. Riley holds a 44% ownership stake, won the bid to serve as JOANN's exclusive agent to monetize its assets through a bankruptcy auction approved by the U.S. Bankruptcy Court for the District of Delaware. The liquidation involves roughly $2 billion in retail inventory and is expected to be completed within 12 weeks.

The new debt facility carries an interest rate of SOFR plus 8% and has a three-year term. As part of the agreement, B. Riley issued Oaktree warrants to purchase 1,832,290 shares of common stock at $5.14 per share, a 20% premium to the 30-day volume-weighted average price. The warrants are valid for seven years.

B. Riley will report preliminary full-year 2024 financial results on March 3 after the market closes.

RILY Price Action: B.Riley shares were up 6.20% at $5.98 at the time of writing, according to Benzinga pro.