Bankrupt colocation data center company Cyxtera has filed a plan of reorganization with the US Bankruptcy Court for the District of New Jersey.
The proposal is supported by lenders that hold over two-thirds of the company’s outstanding first lien debt.
The plan would eliminate more than $950 million of Cyxtera’s pre-filing debt. The company claimed that, in either a recapitalization or sale scenario, it remains on track to emerge from the court-supervised process no later than the fall of this year.
For the potential sale, the company in June said that six parties are seriously looking at acquiring its assets - now, Cyxtera has put a deadline of August 18 for final bids.
“We continue to make important progress in our court-supervised process, while demonstrating solid performance across our business," Nelson Fonseca, Cyxtera’s chief executive officer, said. "Filing this plan with the support of our lenders provides us a path to emerge in a significantly stronger financial position. I want to thank our dedicated team and our customers and partners for their ongoing support.”
Cyxtera filed for Chapter 11 in early June as it struggled with more than a billion dollars in debts, many of which were long-term debts set to mature over the next year. It received $200m in debtor-in-possession financing from some of the lenders to keep it going through the process.
Prior to the filing, the colo firm operated more than 60 facilities totaling more than 245MW across 29 markets globally - with the majority of its portfolio leased. But since the filing, it has rejected leases at two Prime-owned data centers in Silicon Valley, as well as at a Stack-owned data center in Elk Grove, Illinois, and more facilities in Washington and Amsterdam. In its quarterly earnings report, Digital Realty said that it wrote off $25 million of non-cash straight-line rent and $6m in bad debt reserves related to a tenant that is believed to be Cyxtera.
Cyxtera also reported its own unaudited earnings today, saying that revenue increased 8.1 percent to $199m.
"We are pleased to have delivered another quarter of solid growth across the business, underscoring the strength of our offering and the value we create for our global customers," Carlos Sagasta, Cyxtera’s CFO, said. "We expect to continue building on this momentum as we successfully complete the process to strengthen our financial position for the long term."
