GTT Communications Inc. is to file for bankruptcy and restructure.
The Mclean, Virginia-based company said it was entering a restructuring support agreement (RSA) ‘to implement a comprehensive restructuring of the company’s remaining balance sheet.’
As part of the arrangement, GTT is selling its infrastructure division to I Squared Capital. GTT last year agreed to sell the unit for $2.15 billion, and the sale and the transactions related to the restructuring support will reduce GTT’s debt by around $2.8 billion.
Once the sale is complete, the company will file for pre-packaged chapter 11 bankruptcy. It says it plans to emerge from the process, without interruption to its operations.
GTT operations outside of the US are not included in the contemplated filing and will be unaffected by the chapter 11 cases.
The company said the RSA provides for vendors, employees and other partners to be paid during the process, and said it has ‘access to sufficient liquidity to operate its businesses, and with the support of its lenders, 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,” said Ernie Ortega, CEO of GTT. “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.”
Bloomberg reported in February that GTT was considering a bankruptcy filing to solve its debt problems, though reports at the time suggested the move could interfere with the infrastructure sale.