Genesis Holdings, Inc. (OTCID: GNIS) announced it has begun direct discussions with holders of its outstanding convertible debt to explore restructuring into long-term preferred equity, as part of a broader effort to strengthen its balance sheet and reduce capital costs. The initiative aims to align the company's capital structure with long-term strategic objectives ahead of the anticipated launch of its first branded real estate investment fund in collaboration with Aurami Capital.
Under the proposed framework, Genesis seeks to convert convertible debt into long-term preferred stock with revised terms that would significantly reduce conversion-related dilution. If successfully negotiated across all holders, the company believes the restructuring could result in a materially improved balance sheet, potentially placing Genesis 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 assuming control. Since that transition, management has maintained ongoing dialogue with debt holders while prioritizing the operational build-out of its core business and strategic partnerships. “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,” Brito added.
The company emphasized that this 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 with Aurami Capital. Genesis expects to announce further details within the next 45 to 60 days. Completing a balance sheet restructuring ahead of this launch is intended to position Genesis and its partners to engage investors from a position of strength and support its medium-term objective of pursuing enhanced market positioning and potential uplisting opportunities.
Recent discussions have also reflected a shift in alignment among certain existing convertible debt holders, who have expressed support for the company’s strategic direction and progress in executing its business plan. Based on initial conversations, some holders have indicated a greater willingness to participate in long-term value creation initiatives rather than pursuing near-term conversion and liquidation strategies. “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.”
Genesis cautioned that discussions are ongoing and there can be no assurance that any or all proposed restructuring transactions will be completed, nor that final terms will reflect the current framework. The company’s forward-looking statements are subject to risks and uncertainties, including general economic conditions and the success of growth initiatives. More information is available on Genesis Holdings' website.
