BY Fraser Tennant
In a move designed to position itself for future growth, satellite communications provider SpeedCast International Ltd is to emerge from Chapter 11 bankruptcy protection after gaining bankruptcy court approval to restructure under a new owner, private equity firm Centerbridge Partners.
The Australian company decided to recapitalise its business through voluntary Chapter 11 proceedings in April 2020, citing the weakened demand for its connectivity services to cruise lines, oil rigs and other customer platforms following the outbreak of coronavirus (COVID-19).
Under the terms of a plan of reorganisation, Speedcast will emerge from Chapter 11 with a new $500m equity investment from Centerbridge, which will be used in part to repay all of its $285m debtor-in-possession (DIP) financing, as well as a permanent reduction of all its $634m senior secured debt.
The plan also provides for a cash payment to holders of secured claims and cash payment to certain of Speedcast’s critical trade vendors. Unsecured creditors will share in recoveries from a litigation trust.
“The court’s confirmation of the plan marks a key milestone in our efforts to become a stronger business and positions us to emerge in the near term, having achieved our goals,” said Stephe Wilks, chair of Speedcast. “Throughout the restructuring process, our global workforce has delivered on its commitments while adapting to change. On behalf of the Board, we are immensely grateful for the ongoing patience and trust that the company’s employees, customers and partners have shown in this process.”
Speedcast, which serves more than 3200 customers in over 140 countries, expects to emerge from the Chapter 11 process in the first quarter of 2021, subject to final regulatory approvals and satisfying customary closing conditions.
Following emergence, Joe Spytek, who has served as Speedcast’s president and chief commercial officer over the last year, will take on the role of chief executive, leading the company under the new Centerbridge ownership.
Mr Spytek concluded: “Speedcast is well-positioned to maximise its full potential as the company works to build a platform that addresses customers’ most demanding operations and application requirements now, and in the future.”
News: Speedcast to emerge from Chapter 11 with $500M Centerbridge investment