Xtera asset sale procedures approved; auction scheduled for Jan. 25

By Caroline Salls

Pittsburgh, Dec. 6 – Xtera Communications, Inc. received court approval of the bid procedures for the proposed sale of substantially all of its assets, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

An acquisition vehicle established by Xtera’s debtor-in-possession lenders, comprised of one or more affiliates of H.I.G. European Capital Partners LLP, will serve as stalking horse bidder.

Under the stalking horse agreement, the DIP lender vehicle will purchase Xtera’s assets for $10 million in cash, plus the assumption of specified liabilities, with a reduction set by the DIP financing agreement not to exceed $2.6 million.

If the lender vehicle is not ultimately the high bidder for the assets, Xtera will pay it a breakup fee and expense reimbursement not to exceed a total of $500,000.

Competing bids are due by 5 p.m. ET on Jan. 23.

The initial overbid amount is $10 million, plus cash equal to the breakup fee and expense reimbursement, plus $250,000 in cash.

After that, bids must be submitted in minimum increments of $250,000.

An auction will be held on Jan. 25, if necessary. The sale hearing is scheduled for Jan. 30.

Allen, Texas-based Xtera sells high-capacity optical transport solutions to support deployments of optical cable networks. The company filed bankruptcy on Nov. 15 under Chapter 11 case number 16-12577.

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