Existing shareholders in collapsed satellite group, Speedcast International will be wiped out in a deal that could see the company emerge from bankruptcy early next year.
Speedcast shares have been suspended January this year 31 this year. The company later entered Chapter 11 bankruptcy protection in the US.
The shares were trading at 79 cents when they were suspended but had been as high as $6.71 in late 2018 before starting a long slide as a series of operational and other issues hit revenue, saw debt surge, and crippled the company.
As previously indicated, the plan does not contemplate any recovery for existing shareholders, and existing shareholders would no longer have an equity interest in the reorganised Speedcast Group following its emergence from Chapter 11,” the company told the ASX on Monday.
On September 1, Speedcast said it was examining offers from both Centrebridge and Black Diamond Capital Management, the two largest secured creditors.
“Upon emergence, the terms of the Plan would provide Speedcast with a new $US500 million equity investment, led by affiliates of Centerbridge Partners, L.P., and a reduction of all of the $UA634 million senior secured debt of the Company,” the company told the ASX yesterday.
“The Plan has received the unanimous support of Speedcast’s Board of Directors and has the support of the Official Committee of Unsecured Creditors, which has issued a letter recommending that all unsecured creditors vote to accept the Plan.
“The Company and its Board of Directors are confident the current Plan represents the best opportunity to position Speedcast for long-term success while maximizing value for its creditors and other stakeholders. As part of the Plan process, the Company and its creditors can also consider any higher and better Plan proposed prior to the Plan confirmation hearing.
“The Plan provides for a cash payment to holders of secured claims. A number of the company’s trade vendors are crucial to its future, and the Plan provides these crucial trade vendors with a partial cash payment on account of their unsecured claims.
“Unsecured creditors generally will share in recoveries from a litigation trust. As previously indicated, the Plan does not contemplate any recovery for existing shareholders, and existing shareholders would no longer have an equity interest in the reorganized Speedcast Group following its emergence from chapter 11.
