Copy pasta from the article:
https://www.theaustralian.com.au/business/dataroom/speedcast-rapidly-running-out-of-options-as-bankruptcy-nears/news-story/2d28c3209b120106236070828577e855The clock is ticking for remote communications and satellite services provider Speedcast, with some betting that the next step for the company is Chapter 11 bankruptcy.
The Australian-listed company generates a large proportion of its revenue from the US, where a Chapter 11 allows a company that is unable to pay its debts protection from trading while insolvent, yet the creditors take control.
It usually results in a company reorganisation and then a return to normal trade.
Speedcast’s law firm Weil, Gotshal & Manges is based in New York and has experience in Chapter 11 cases, which is why many are suspecting that this is on the cards for Speedcast.
However, sources close the company say it is in the process of renegotiating a funding package with its lenders.
Speedcast currently has a forbearance agreement in place where its lenders have excused debt covenant breaches and failures to deliver on interest payments.
However, with the agreement already extended once to April 24, time could now be running out for the group.
Greenhill’s is working with Speedcast’s lenders out of the US, while restructuring firm Moelis is working for the company along with Canaccord.
Raising equity has been ruled out as an option for the company that posted a $469m loss for 2019 and is buckling under $669m of total borrowings at December.
The big problem for Speedcast is that it was struggling before the COVID-19 disruptions hit, and the large portion of earnings it generates from the cruise ship industry is not expected to return any time soon.
The alternative plan for Speedcast was earlier seen as selling non-core assets, but few buyers are said to exist.
The company has not offered any insight into its 2020 earnings due to the uncertain environment linked to the COVID-19 disruptions.
Speedcast’s lenders have provided $US600m from the term loan B market in the US.
Other original banks that have had a $100m revolving credit facility with the company include Credit Suisse, Citi, Macquarie Group, ING and Credit Agricole.
It is understood that debt in the company has been recently trading on the secondary market for as little as 20c in the dollar through Bank of America.
Following the global emergency surrounding the coronavirus pandemic, many question its chances of survival.
When the company last traded, it was worth less than $200m, having been worth as much as $1.4bn in 2018.
