Rockley Photonics Holdings Ltd., which makes microchips that can be used in wearable health monitoring devices, filed for bankruptcy with a creditor-backed plan that will hand control of the business to bondholders, WSJ Pro Bankruptcy reported. Publicly traded Rockley said in court papers filed Monday in the U.S. Bankruptcy Court in New York that it has won support for a chapter 11 plan of reorganization under which bondholders who are owed roughly $119 million will forgive that debt in exchange for equity in the reorganized business. Bondholders also agreed to provide Rockley with $35 million in new financing in the form of a chapter 11 exit loan and private placement agreement offering bondholders the right to purchase an additional $20 million of the reorganized company’s stock. Rockley said the restructuring plan was negotiated and agreed to following a monthslong marketing process spearheaded by the company’s investment banker, Jefferies LLC. Rockley said that although it has developed groundbreaking silicon photonics chips that can be used in wearable health monitoring devices, the company has yet to bring any products to market. The company said it is working with other businesses on specific designs for its chips and it has shipped some early prototypes, anticipating the chips will ultimately be used in wearable health monitoring devices. President and Chief Executive Richard Meier said in a sworn statement that Rockley recorded net losses of $117 million in the nine months ended Sept. 30. Mr. Meier said the chapter 11 plan is a significant achievement given Rockley’s liquidity issues and added the restructuring should ensure the company’s long-term viability.
