QualTek Services, an infrastructure services provider, announced that its plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the Southern District of Texas. The plan has the overwhelming support of the company’s major stakeholders, including, 100% of voting secured debt holders and 100% of voting convertible noteholders. This milestone comes less than six weeks after filing, representing an expeditious step forward toward emergence from the company’s Chapter 11 cases, which it expects to occur in mid-July.
As a result of its restructuring efforts, QualTek will emerge from Chapter 11 with a significantly stronger balance sheet. Through the confirmed plan, QualTek will eliminate $307 million of debt. The company also intends to enter into $25 million exit term loan financing (in addition to the $40 million previously funded DIP financing) and an ABL facility with $101.2 million in availability to ensure that it is well capitalized in the future.
“With today’s announcement, QualTek is poised to emerge from our financial restructuring well positioned to continue to provide best-in-class infrastructure services for our valued customers,” Scott Hisey, CEO of QualTek, said. “We believe QualTek will have significant opportunities in the coming years across the wireless, wireline/fiber, 5G, renewables and recovery sectors, and are excited to enter this next chapter for our company. I want to thank our customers and vendors for their continued support during this process as we position our business on a more stable foundation. I also want to express my appreciation to our employees for their hard work and focus on delivering exceptional results, and we look forward to building on our track record as a dedicated employer of our military veterans.”
QualTek will emerge as a private company under the ownership of their prepetition lenders. The current management team will continue to lead the company, with roles and responsibilities across the team remaining the same. The plan also provides for general unsecured creditors and trade claims to be unimpaired.
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 the company. The company has retained C Street Advisory Group to serve as the strategy and communications advisor.
