Thursday, June 8, 2023
While the arrangement is expected to have no impact on the day-to-day operations of the hardware manufacturer, or its vendors, common stockholders will take a big hit. The company's outstanding common shares are to be cancelled under the restructuring plan.
Under terms of the plan, agreed to by nearly 80 percent of creditors, most of the company's $2.7 billion debt load will be discharged in lieu of a $1.25 billion debtor-in-possession facility that will be used to support restructuring costs, pay vendors and support ongoing operations of the company.
"Our company is focused on continuing our solid operational performance and delivering best-in-class products and services to banks and retailers around the world," Octavio Marquez, Diebold Nixdorf chairman, president and CEO, said. "With the support of our creditors we have reached an agreement to restructure and strengthen our balance sheet, enhance liquidity and position Diebold Nixdorf for long-term success."
"I think the debt restructuring bodes well for Diebold and its customers," said Jack Milford Ford, an Oregon-based attorney whose client roster includes ATM ISOs and IADs.
Diebold Nixdorf has been ranked as the leading manufacturer of ATMs with 32 percent of the global market, followed by NCR, with 27 percent of global market share. The company, in its current form, was created through the 2016 acquisition of Wincor Nixdorf, a German financial technology firm, by Diebold, which was founded in 1859 as a manufacturer of safes.
But the combination, financed largely with debt, failed to generate expected efficiencies and revenue boosts, and Diebold Nixdorf has struggled to meet its debt obligations.
In April, the company's stock lost 54 percent of its value, according to Zacks, the stock research firm. In late May, shares of Diebold Nixdorf were trading at $0.25, down from a 52-week high of $5.27. Trading in the company's stock was halted by the New York Stock Exchange, which disclosed on June 2 its planned delisting of Diebold Nixdorf.
Diebold Nixdorf said it expects the restructuring to be completed in the third quarter of this year, and that the restructured company will be listed on the NYSE.
Diebold Nixdorf's future also has been clouded by the continuing shift toward digital payments, and the subsequent reduction in demand for cash-dispensing ATMs.
"The ATM industry has been in a state of decline for a number of years now," Ford said. "But COVID probably had the most negative impact on ATMs." When state and local governments ordered shutdowns in the food and entertainment sectors—bars, restaurants, clubs, etc.—legions of ATMs sat idle.
According to the banking and payments consulting firm RBR, the number of operating ATMs in the United States has been slowing since 2010. The Federal Reserve reported that domestic ATM usage dropped by 10 percent between 2018 and 2021.
By most accounts, the Asian market is the next big frontier for ATMs. Grandview Research predicted a combined annual growth rate in ATM deployments there of 5.9 percent between now and 2028. The consultancy expects much of that growth to be registered in developing countries like China and India.
Several Asian ATM manufacturers already have thriving businesses in China. Chinese government regulations prohibit foreign manufacturers from entering that market without domestic partners. That may keep American firms out of the market.
That is not to suggest, however, that Chinese manufacturers aren't looking to other ATM markets, like the United States. "Keep an eye on ATM manufacturer GRG out of China," one industry expert suggested. "They have great technology, but tariffs and long wait times due to supply chain issues have been a challenge." 
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