On August 13, Speedcast stated that private investment management firm Centerbridge Partners of New York and London had offered to pay USD 395 million to obtain 100 percent of the equity in the reorganized company.
Fremont, CA: Satellite communications provider Speedcast is looking to sell itself to one of its largest debt holders to exit Chapter 11 bankruptcy protection. The Australian company filed for bankruptcy protection in April as the coronavirus pandemic weakened demand for its connectivity services to cruise liners, oil rigs, and other customer platforms.
On August 13, Speedcast stated that private investment management firm Centerbridge Partners of New York and London had offered to pay USD 395 million to obtain 100 percent of the equity in the reorganized company. As per Speedcast’s understanding, Centerbridge appears to have gained control of the majority of the company’s debt, alongside Black Diamond Capital Management, another financial institution, through debt trading during the bankruptcy proceeding.
Speedcast stated that the buyout has the support of its official committee of unsecured creditors, but may run contrary to the desire of Speedcast’s debtor-in-possession financers, which sought an asset sale. According to the company, other financiers, who were not named, have committed USD 90 million in new money loans, so Speedcast could continue operations while under bankruptcy protection.
Speedcast has informed the United States Bankruptcy Court for the Southern District of Texas that the terms of its debtor-in-possession financing contain several provisions its lenders could invoke to block the sale to Centerbridge. The company has asked
the court to determine that the USD 395 million transaction will not violate the debtor-in-possession agreement.
The company also stated that Centerbridge offered USD 220 million in new debtor-in-possession financing that would repay Speedcast’s earlier bankruptcy loan, and that comes with better repayment terms. Throughout the buyout, Speedcast Chief Executive Peter Shaper and President Joe Spytek will stay as the company’s leadership.
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