Leslie’s Inc. (NASDAQ:LESL) shares gained 23.38% to $0.20 in after-hours trading on Wednesday after the Arizona-based pool and spa care retailer announced it signed a restructuring support agreement (RSA) with existing lenders.

Debt Reduction Anchors the Deal

According to the company’s Wednesday announcement, the deal would reduce funded debt by about $685 million, or 90%. It includes $90 million in new-money debtor-in-possession (DIP) financing and a $60 million equity financing. Certain RSA parties fully backstop the equity portion.

The company also seeks court approval for a $225 million asset-based DIP facility from existing asset-based lending (ABL) lenders. Leslie’s said the arrangements would provide sufficient liquidity through the bankruptcy process.

Store Closures and Lender Control

Leslie’s filed prearranged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas. The company also announced the closure of 76 stores. All other stores and its digital platforms remain open, it said.

Upon emergence, targeted for early 2027, existing lenders are expected to hold majority ownership. Such a shift typically leaves current shareholders with limited recovery.

“Leslie’s is here to stay,” CEO Jason McDonell said.

Trading Metrics, Technical Analysis

Leslie’s has a market capitalization of $1.48 million, a 52-week high of $12.53 and a 52-week low of $0.13.

The Relative Strength Index (RSI) of LESL stands at 22.43.

The stock has fallen 97.36% over the past 12 months.

LESL is currently trading near its 52-week low.

Price Action: The stock closed the regular session on Wednesday at $0.16, down 26.54%, according to Benzinga Pro data.

Benzinga’s Edge Stock Rankings indicates Leslie’s stock has a negative price trend across all time frames.

See More: Top Value Stocks

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo Courtesy: fadil051922 on Shutterstock.com