B. Riley Financial has had a busy month working to mitigate debt and strengthen its balance sheet as the company grapples with financial and reputational hits sparked last summer by an SEC investigation.

Most recently, the Sawtelle-based financial services company struck a deal with an unnamed institutional investor which it says will reduce outstanding debt by about $35 million. As of Dec. 31, B. Riley reported $1.8 billion in total debt.

Through this agreement, the investor will exchange $123 million in outstanding senior notes for $88 million in newly issued 8% senior notes which will be due in 2028. The investor is also being given the right to purchase 351,000 shares of B. Riley stock for $10 per share

Deal to address ‘capital structure’

Bryant Riley, chair and co-chief executive, said this deal “represents an important incremental step in addressing our capital structure” in a statement.

Riley also announced a tax-free carve-out with B. Riley Securities on March 11, in which BRS merged with Cascadia Investments, a shell entity – though B. Riley will retain 89% ownership.

“Through BRF’s 89% ownership stake, BRF shareholders will retain important upside potential as BRS capitalizes on an expected recovery in M&A and capital markets activity,” Riley said.

Other recent moves for B. Riley include the sale of portfolio company Atlantic Coast Recycling from which the company expects to see a $30 million gain; securing a $160 million senior debt facility backed by Oaktree Capital Management; and entering into a joint venture to oversee the liquidation of JOANN fabric store.

As for what’s next for the company, Riley is determined to keep his namesake afloat.

“While we recognize we have work to do, we do believe the worst is behind us and remain confident in the future based on the underlying strength of our core businesses, including B. Riley Securities,” Riley said.