GTT Communications, a cloud networking provider to multinational clients, entered into a restructuring support agreement with key stakeholders, including holders of a majority of its secured and unsecured debt and I Squared Capital, to implement a restructuring of the company’s remaining balance sheet following completion of the pending sale of its infrastructure division.
The agreement places GTT on a path to improve its capital structure and execute its long-term business strategy. Pursuant to the RSA, the company expects to close the previously announced sale of its infrastructure division to I Squared Capital in the coming weeks, which will allow GTT to repay a significant portion of its secured debt.
Following the close of the sale of the infrastructure division, GTT and certain of its direct and indirect subsidiaries intend to commence prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of New York to effectuate a deleveraging of GTT’s post-sale capital structure. GTT’s foreign businesses and operations outside of the U.S. are not included in the contemplated filing and will be unaffected by the Chapter 11 cases. The company expects to emerge from this process after obtaining the necessary regulatory approvals for the restructuring.
GTT is operating and serving its customers in the U.S. and globally without interruption. The RSA provides for vendors, employees and other partners to be paid in the ordinary course of business for obligations incurred prior to and after the commencement of the anticipated Chapter 11 cases. The company has access to sufficient liquidity to operate its businesses, and with the support of its lenders, will retain additional amounts from the sale proceeds to further strengthen its cash position.
“This global agreement among each of our creditor constituencies resulted from extensive negotiations and reflects the ongoing commitment of our debtholders to the business,” Ernie Ortega, CEO of GTT, said. “Our performance has been strong year to date, and we have a very competitive product portfolio in growing segments of the market, such as SD-WAN. To continue this momentum, we are working together with our debtholders to improve GTT’s financial health and this is a major milestone to accomplish this goal.
“I would like to thank our GTT team for continuing to deliver outstanding services to our valued clients and our board of directors for its steadfast support. I would also like to express my utmost gratitude to our customers and valued partners around the globe with whom we are honored to work.”
GTT’s legal advisor in connection with the restructuring is Akin Gump Strauss Hauer & Feld. Alvarez & Marsal North America is serving as GTT’s restructuring advisor and TRS Advisors, a group within the investment banking division of Piper Sandler, is serving as its investment banker for the restructuring.
