QualTek Services, an infrastructure services provider, announced a restructuring transaction that will reduce the company’s debt by approximately $307 million and provides $40 million of additional liquidity.

To facilitate the financial restructuring, the company and certain of its subsidiaries filed voluntarily petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. QualTek expects significant support of its lenders through this process, including at least 85% of the company’s secured debt holders and approximately 80% of its convertible noteholders. The company will be filing a restructuring support agreement and plan of reorganization, which contemplates that, upon emergence from Chapter 11, there will be new ownership comprised of the company’s existing lenders and management team.

“For more than a decade, QualTek has provided critical services across the U.S. telecommunications and utilities industries,” Scott Hisey, CEO of QualTek, said. “The transactions announced today will position our company to continue providing best-in-class service to our customers, remain a dedicated employer of our military veterans and build on our industry-respected track record. We are entering this process with the overwhelming support of our lenders and customers, which we expect will enable us to move through this process quickly and without disruption. With the continued dedication of our employees and partners, we plan to emerge stronger and ready to build for the future.”

Under the terms of the RSA, QualTek expects to receive a $65 million debtor-in-possession term loan financing facility, which will include new money funding of $40 million. Upon approval by the court, the DIP facility will provide the company with the stability and liquidity needed to continue operations in the ordinary course of business and pay vendors during the reorganization. The company’s management team is continuing to lead the business, with roles and responsibilities across the team remaining the same and operations across the company expected to continue as usual.

QualTek is filing customary first day motions with the court to facilitate the transition into Chapter 11. These motions, which the company expects to be approved in short order, include requests to pay wages and benefits, pay trade vendors and ensure the continuation of business operations without interruption. The company will continue servicing its existing customers, vendors, partners and other stakeholders in the ordinary course of business.

Kirkland & Ellis and Jackson Walker are serving as legal counsel, Jefferies is serving as investment banker and Alvarez & Marsal is serving as financial advisor to QualTek. The company retained C Street Advisory Group to serve as its strategy and communications advisor.