The recent news about the joint venture of TPG, states that IPCo (A bankruptcy mechanism organization) now owns Xerox IPO.
In the new agreement there is a revenue covenant clause, that states certain thresholds for maintaining branded revenue (Excludes Lexmark, Fittle etc.)
The thresholds are as follows:
June 30: $2.578B
September 30: $3.852B
December 31: $5.225B
If Xerox fails to meet these revenue tresholds, the SSLA requires IPCo to initiate an event of default.
In otherwords, if Xerox does not meet the $5.225B brand line revenue in 2026 they will be going into default.
In 2025 Xerox did roughly $5.5B in brand line revenue. In other words: Does the brand line revenue decline with more than 5% this year again a default event will happen.
With the mass layoffs, mainly on the Xerox side, this is highly likely to happen.
In other words, we are now within the last 12 months.