Speedcast files for bankruptcy
2020-04-30 / Number of views:120
Satellite communications company Speedcast has filed for bankruptcy under chapter 11 of the United States Bankruptcy Code, citing the global COVID-19 pandemic and impact this has had upon Speedcast’s cruise line customers. These dynamics made it impossible for Speedcast to complete its planned equity raise – or any recapitalisation transaction – outside of the Court-supervised chapter 11 process.
Speedcast has received a commitment for up to $90 million in new money debtor-in-possession financing from the holders of its outstanding term loan debt, which combined with its existing cash flows, will help to ensure it is able to meet its go-forward commitments to all stakeholders throughout the restructuring.
The U.S. chapter 11 process provides a legal framework through which Speedcast will work with creditors and other stakeholders to develop a Plan of Reorganisation that specifies how the Company will reduce its debt and gain access to new sources of liquidity. This is a proven process that many companies have successfully utilised to achieve their financial goals and position their businesses for long-term growth and success. Speedcast plans to emerge from the process during the 2020 calendar year, and ideally hopes to have it completed within six months.
“The decisive actions we announced today are about strengthening our financial position through the proven legal framework that the chapter 11 process provides – and we are confident we will be well positioned to maximise the full potential of our expanded platform as a result of the actions we’re taking now to align our balance sheet strength with our clear industry leadership,” said Peter Shaper, Speedcast chief executive officer and executive director. “We fully expect that our customers and employees, among other stakeholders, will see no change in their interactions with our Company as a result of this filing. In fact, we expect to be a stronger business partner and employer as result of the additional financing our existing lenders have committed, based on their strong belief in our go-forward potential.”
While under the Court’s protection, Speedcast says that it fully intends to continue its global operations uninterrupted. Customers should expect to receive the same products and services delivered by Speedcast prior to the chapter 11 filing and should see no changes in the way they interact with the Company.
Speedcast also said in its statement published on Friday that it has taken the necessary steps and fully intends to pay employees as usual, regardless of entity or where they are based. Employees should not see any changes in their roles, wages or benefits as a result of the filing and will continue to work diligently to provide uninterrupted service to the Company’s customers and other stakeholders.
The news from Speedcast comes just one month after OneWeb announced that it was filing for bankruptcy.
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