Speedcast International files Chapter 11 plan, disclosure statement

By Sarah Lizee

Olympia, Wash., Oct. 13 – Speedcast International Ltd. filed its joint Chapter 11 plan of reorganization and related disclosure statement on Saturday in the U.S. Bankruptcy Court for the Southern District of Texas.

The plan calls for complete discharge of the company’s debt under the syndicated facility agreement in the amount of $633.9 million.

In addition, a plan sponsor selection process will run simultaneously with the solicitation of the debtors’ plan, with the goal of securing potentially higher recoveries for the debtors’ creditors.

The plan also calls for a $500 million equity investment provided by the plan sponsor in cash or a greater amount as may be determined under the plan sponsor selection process.

The plan also provides for at least a $150 million recovery for holders of allowed syndicated facility secured claims, a $25 million recovery to holders of unsecured trade claims and establishment of a litigation trust for the benefit of other unsecured claims.

Holders of other priority claims will receive cash equal to the amount of their claims.

Holders of other secured claims will receive cash equal to the amount of their claims, have their claims reinstated or receive other treatment sufficient to render their claims unimpaired.

All intercompany claims will be adjusted, continued, settled, reinstated, discharged, eliminated or otherwise managed.

Holders of subordinated claims will not receive or retain any property.

Parent interests will be cancelled with no distribution.

At the option of the reorganized debtors, in consultation with the plan sponsor, all allowed intercompany interests will either remain unaffected by the plan and continue in place or be cancelled, and holders will not receive or retain any property.

The debtors are requesting a combined hearing on approval of the disclosure statement and confirmation of the plan on Dec. 10.

Also on Saturday, the debtors entered into an amended and restated equity commitment agreement under which Centerbridge Partners, LP, one of the company’s largest lenders, committed to make a new-money equity investment for 100% of the equity interests in a newly formed parent entity of the debtors and their non-debtor affiliates for an aggregate amount of $500 million. Centerbridge initially agreed to a $395 million equity commitment, as previously reported.

Speedcast is an Australia-based provider of remote communication and IT solutions. The company filed bankruptcy on April 23 under Chapter 11 case number 20-32243.

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