According to the Complaint, Babcock is a global leader in energy and environmental technologies and services
for the power and industrial markets.
This action stems from a proposed transaction announced on April 5, 2019, pursuant to which the Board of Directors of Babcock & Wilcox Enterprises, Inc. caused the Company to amend its credit agreement with its current lenders, whereby B. Riley FBR, Inc., which owns 6.5% of the Company’s outstanding shares, has joined the facility and has arranged an additional $150 million in secured financing through a last out term loan, and has agreed to provide an uncommitted incremental credit facility of up to another $15 million. In connection with the amendment, the Company agreed to seek shareholder approval to increase the number of its authorized shares, execute within six months a $50 million rights offering at $0.30 per share (the proceeds of which will be used for repayment of a portion of the new debt) and, immediately thereafter, exchange $35.1 million of the last out term loan held by Vintage Capital Management LLC, which owns 17.8% of the Company’s outstanding shares, for common stock at $0.30 per share, issue approximately 16.7 million warrants, each to purchase one share of common stock for $0.01 per share, and execute a 1:10 reverse stock split.
On May 13, 2019, Defendants filed a proxy statement with the United States Securities and Exchange Commission, which seeks stockholder approval of the Proposed Transaction and scheduled a stockholder vote for June 14, 2019. The Complaint alleges that the Proxy Statement omits material information with respect to the Proposed Transaction, which renders the Proxy Statement false and misleading.