2U (NASDAQ: TWOU) stock skyrocketed during intraday trading Monday. The volatility comes after the company filed for a voluntary “prepackaged” Chapter 11 last week.
On July 25, 2U announced a major financial restructuring to strengthen its balance sheet and advance its mission of making high-quality education accessible worldwide.
The company has secured a Restructuring Support Agreement (RSA) with lenders and noteholders holding about 87% of its outstanding debt. This agreement will inject approximately $110 million of new capital into 2U, cut its debt by more than 50% to around $459 million, and extend the maturity of its revolving and term loans by over two years.
To implement the transaction, 2U and its certain domestic subsidiaries have filed for voluntary “prepackaged” Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. As part of the process, the company aims to secure court approval for $64 million in financing to support its operations throughout the bankruptcy proceedings. The company expects to complete this Chapter 11 process by the end of September, if not sooner.
2U has also filed several customary motions with the court to keep its operations running smoothly during the transaction. The company said it will proceed with all programs as planned, ensuring no impact or disruption to learners due to this process. 2U will keep providing all services for partners and students. Additionally, the RSA anticipates that payments to vendors will continue as usual.
Upon receiving court approval and completing the transaction, 2U expects to emerge from Chapter 11 as a private company. The company’s existing lenders and noteholders, including Mudrick Capital Management, LP, Greenvale Capital LLP, and Bayside Capital, LLC, will back the restructured company.
2U (NASDAQ: TWOU) Stock Price Action
TWOU stock soared 112% on Monday, closing at $2.65, marking a 40.85% decrease for the week. The trading volume was 139,181,360 shares, significantly higher than the average daily volume of 2.43 million.
