Genesis Holdings, Inc. (OTCID: GNIS) announced that it has initiated direct discussions with holders of its outstanding convertible debt to explore restructuring into long-term preferred equity. The company aims to strengthen its balance sheet, reduce the cost of capital, and align its capital structure with long-term strategic objectives.
Under the proposed framework, Genesis seeks to convert convertible debt into preferred stock with revised terms that would significantly reduce conversion-related dilution. If successfully negotiated, the company believes this restructuring could result in a net positive equity position. Additional elements under discussion include lock-up provisions and structured leak-out agreements to promote long-term alignment with capital partners.
“We recognize that our capital structure has been a key concern for our common shareholders,” said Oscar Brito, CEO of Genesis Holdings. “We are actively addressing this issue in a thoughtful and proactive manner, with the goal of creating a stronger and more sustainable foundation for the Company.”
Genesis noted that the majority of the existing convertible debt was in place prior to the current management team. Since then, management has maintained dialogue with debt holders while focusing on operational build-out and strategic partnerships. Brito added, “With the foundational elements of our platform now largely in place, and with our strategic partnership initiatives advancing, we are now fully focused on optimizing our capital structure.”
The restructuring initiative is being undertaken in parallel with the continued execution of its broader business strategy, including the anticipated launch of its first branded real estate investment fund in collaboration with Aurami Capital, a subsidiary of Miami Real Investment. Genesis expects to announce further details within 45 to 60 days. The company believes that completing a balance sheet restructuring ahead of this launch will position it and its partners to engage investors from a position of strength, while supporting medium-term objectives of enhanced market positioning and potential uplisting.
While discussions are ongoing and described as constructive, Genesis cautioned that there can be no assurance that any or all proposed restructuring transactions will be completed. Recent discussions have reflected a shift in alignment among certain debt holders, who have expressed support for the company’s strategic direction. Based on initial conversations, some holders have indicated a greater willingness to participate in long-term value creation rather than pursuing near-term conversion and liquidation.
“We are encouraged by the initial conversations and the alignment we are seeing,” Brito said. “While nothing is finalized, we are optimistic about reaching agreements that benefit both the Company and our capital partners, and we expect to provide further updates in the near term.”
Aurami Capital is a real estate investment platform focused on branded luxury residential and hospitality opportunities. More information is available at https://auramicapital.com/. Miami Real Investment is a brokerage firm specializing in branded luxury pre-construction real estate in Miami. Details can be found at https://miamirealinvestment.com/. Travaleo, a wholly owned subsidiary of Genesis Holdings, is a branded real estate investment platform. More at https://www.travaleo.com/.
