Speedcast International Limited has announced that the U.S. Bankruptcy Court for the Southern District of Texas has confirmed Speedcast International Limited and certain of its affiliates’ Plan of Reorganisation. The confirmation clears the path for the company to complete the Chapter 11 process after receiving final regulatory approvals and satisfying customary closing conditions, which is expected by the end of Q1 of 2021. The company is poised to emerge with a significantly strengthened balance sheet and the support of Centerbridge Partners, L.P. and its affiliates as its new owner.
Joe Spytek will take on the role of Speedcast’s Chief Executive Officer, leading the company upon emergence under the new Centerbridge ownership. Spytek has served as Speedcast’s President and Chief Commercial Officer for the last year after being tapped to join the organisation to help implement its turnaround.
Speaking about the plan Stephe Wilks, Chair of Speedcast said: “The Court’s confirmation of the plan marks a key milestone in the company’s efforts to become a stronger business and positions us to emerge in the near term, having achieved our goals. Throughout the restructuring process, the company’s 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.”
Spytek commented: “With a bolstered financial foundation and with the support of Centerbridge, one of the world’s leading investment funds, 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. Looking ahead, this agility and commitment to innovation will continue as Speedcast keeps raising the bar for itself and the industry as a whole.”
Jared Hendricks, Senior Managing Director, Centerbridge added: “Speedcast’s technology and connectivity solutions provide a leading value proposition to the company’s customers, enhancing productivity, communication and safety. We continue to be excited about investing behind Joe and the Speedcast team’s innovation and support of its customers and partners in the next phase of growth for the company.”
Under the terms of the plan, Speedcast is set to emerge with a new USD $500m equity investment from Centerbridge, which will be used in part to repay all of its USD $285m debtor-in-possession financing, as well as a permanent reduction of all of the USD $634m senior secured debt of the company.
As previously indicated, the plan also provides for, among other things, 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 plan does not contemplate any recovery for existing shareholders, who will no longer have an equity interest in the reorganised company following its emergence.
Speedcast first announced its decision to recapitalise its business through voluntary Chapter 11 proceedings on April 23, 2020.