(Bloomberg) -- McAfee’s former enterprise business is weighing a deal for fresh capital from Elliott Investment Management as its liquidity wanes, according to people with knowledge of the situation.
The proposal would give the business a $400 million first-out term loan, said the people, who asked not to be identified because discussions are private. The new loan would be backed by intellectual property assets transferred to a new unit of the company, and would strengthen Elliott’s claim on the collateral and improve its position in the repayment line, the people added.
Talks aren’t final and plans could change, the people said.
Symphony Technology Group purchased the enterprise business in 2021 and split it into two segments, Trellix and Skyhigh Security. A more than $3 billion loan that funded the buyout is now quoted at around 54 cents on the dollar, according to data compiled by Bloomberg.
As the companies teetered, Elliott and other creditors organized into rival groups, with Elliott getting advice from PJT Partners, and other creditors tapping Centerview Partners and Akin Gump Strauss Hauer & Feld. Elliott is positioned to provide the new loan after some other lenders balked at terms during restructuring discussions, the people said.
Messages left with Trellix, Skyhigh, Symphony Technology Group, Elliott, Akin and Centerview were not returned. A representative for PJT declined to comment.
Moody’s Ratings said last month that the company faces “weakening liquidity,” challenges reversing revenue declines and “uncertainty” over when it will generate cash.
In late 2022, Elliott purchased more than half of a $415 million leveraged loan that paid a dividend to Symphony.
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