Since gaining permission to restructure under a current buyer, private equity company Centerbridge Partners, satellite communications company Speedcast International Limited is expected to exit from Chapter 11 bankruptcy by March 31. The United States Bankruptcy Court for Southern District of Texas approved the Australian firm’s proposal to name Joe Spytek, President of Speedcast, as well as Chief Commercial Officer, as the Chief Executive. “Speedcast is well-positioned to maximize its full potential after reorganization, as the firm works to create a platform that tackles the most challenging operations as well as application demands of customers now and for the future,” Spytek stated in a statement.
Centerbridge Partners, one of Speedcast’s biggest creditors before filing bankruptcy proceedings, is making an additional commitment of $500 million in the firm under the conditions of the reorganization deal announced on January 25. Speedcast will reimburse its $285 million debtors in possession funding with that financing, allow cash payments to sellers, and, as per the press release, decrease its $634 million senior guaranteed debt. The unsecured creditors of Speedcast would share in the rehabilitation of a litigation fund. The group’s current owners would have no ownership stake in the restructured company under the Speedcast’s reorganization strategy.
In April 2020, Speedcast revealed plans to apply for the Chapter 11 bankruptcy protection as the coronavirus epidemic eroded the market for cruise ships, oil rigs as well as other consumer platform communication services. Jared Hendricks, who works at the Centerbridge as a Senior Managing Director, stated: “We are optimistic that Speedcast is perfectly placed in the remote communications industry with several levers for the value creation and development, based on our experience participating in and promoting the growth of the satellite, telecommunications as well as information technology services systems.” We look forward to working and collaborating with the executive team behind the plan of the company.
The proposal received the unanimous approval of the Board of Directors of the Speedcast and is approved by the Official Committee of the Unsecured Creditors, which released a letter requesting that all unsecured creditors adopt the Plan. As previously stated, the Proposal would not consider any redemption for current shareholders. After its release from Chapter 11, existing shareholders will no longer have an ownership stake in the restructured Speedcast Group.
The Organization, as well as its Board of Directors, are adamant that the Proposal is the best way for Speedcast to be prepared for long-term growth, thus increasing value for its creditors as well as other stakeholders. On April 23, 2020, Speedcast first declared its intention to recapitalize its company via voluntary Chapter 11 hearings.https://expresskeeper.com/