RCom subsidiary initiates voluntary, pre-packaged Chapter 11 restructuring
NEW YORK: Global Cloud Xchange (GCX), a subsidiary of Reliance Communications (RCom), has announced a pre-packaged Plan of Reorganization that will support its long-term growth and development by reducing bond debt by $150 million, providing a permanent capital structure that includes working capital facility and transitioning the business to new ownership.
The company that offers a comprehensive portfolio of solutions customized for carriers, enterprises and new media has initiated a voluntary case under Chapter 11 of the US Bankruptcy Code to effectuate the Plan while continuing to serve its customers as usual.
“Upon emergence from this process, the company expects to be well-positioned to aggressively pursue its business plan independent of the overhang caused by its corporate parent’s challenges. More than 75 per cent of the company’s lenders have already committed their support for the Plan, which outlines the terms for a transaction through which GCX’s senior secured note holders would become owners of the company and provide new loans to support and grow the business,” a company statement explained.
GCX owns the world’s largest private undersea cable system spanning more than 68,000 route kms. To ensure GCX maximizes value for its stakeholders in this process, the company said it will also use the protections and framework of Chapter 11 to undertake a sale process that welcomes additional prospective buyers.
GCX expects to complete the Chapter 11 process and emerge as a stronger company within the fourth quarter of 2019, subject to all required regulatory approvals.
The statement s said that customers, suppliers and employees should expect to work with all GCX entities as usual throughout the Chapter 11 process.
The Plan does not contemplate any changes in business arrangements or activities for any GCX subsidiary, and according to the terms of the plan, all trade/vendor claims will be paid in full. “We appreciate the strong collaboration with our lenders, which has resulted in a Plan of Reorganization that allows us to honour our commitments to employees, customers and suppliers while also securing a financially strong future for our business,” said Bill Barney, Chairman and CEO of GCX.
He said GCX is a fundamentally strong company, providing mission- critical, expertly managed network solutions for telecommunications, global enterprise and OTT customers. “The steps we are announcing today will allow us to continue to build on our strengths and emerge as an even stronger employer and business partner,” he added.