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GTT Files for Chapter 11 to Implement Prepackaged Plan

November 01, 2021, 07:50 AM
Filed Under: Bankruptcy

GTT Communications, a leading global cloud networking provider to multinational clients, announced that the Company and certain of its direct and indirect subsidiaries have commenced prepackaged chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York to effectuate a deleveraging of GTT’s capital structure. GTT’s foreign businesses and operations outside of the U.S. are not included in the filing and are unaffected by the chapter 11 cases.

As previously announced, on September 1, 2021, GTT entered into an RSA with key stakeholders, including holders of a majority of its secured and unsecured debt and I Squared Capital, to implement a comprehensive restructuring of the Company’s balance sheet following the sale of its infrastructure division to I Squared Capital. The sale closed on September 16, 2021.

Subsequent to executing the RSA and the closing of the sale, GTT solicited acceptances of its Prepackaged Plan, which received overwhelming support from its debtholders. Lenders holding over 88% of the aggregate outstanding principal amount of GTT’s secured loans and holders of over 88% of the aggregate outstanding principal amount of GTT’s 7.875% Senior Notes due 2024, including all lenders and noteholders that voted on the Prepackaged Plan, voted to accept. The Company is seeking to have the Prepackaged Plan confirmed in mid-December.

The Prepackaged Plan advances GTT on its path to improve its capital structure and execute its long-term business strategy. The combination of the completed infrastructure division sale and the transactions contemplated by the Prepackaged Plan will reduce the Company’s debt by approximately $2.8 billion.

GTT is operating and serving its customers in the U.S. and globally without interruption. The RSA and the Prepackaged Plan provide 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 chapter 11 cases. The Company has access to sufficient liquidity to operate its businesses including the payment of all such obligations. GTT expects to emerge from this process following receipt of the necessary regulatory approvals for the restructuring.

Ernie Ortega, Chief Executive Officer of GTT, said, “I am pleased by the support we’ve received from our debtholders and other stakeholders demonstrating their confidence in the Company’s business plan and long-term strategy. Following the entry into the RSA, we closed the sale of our infrastructure division, and repaid a significant portion of our secured debt, as we said we would. Commencing the Company’s chapter 11 cases is the next major milestone that enables us to further strengthen our financial position as we continue to operate our business around the world.”

Ortega added, “GTT remains committed to providing market-leading network solutions to our clients throughout the restructuring process and beyond. The main pillars of our business strategy that focus on operational excellence and providing a differentiated customer experience remain intact. We will continue to place the needs of our customers first, encouraged by the positive progress we are seeing across the key operational metrics impacting customer experience. I am thankful for everyone on our team who works tirelessly to deliver top-tier services to our global client base. I would also like to express my gratitude to our valued clients with whom we are honored to partner.”

GTT’s legal advisor in connection with the restructuring is Akin Gump Strauss Hauer & Feld LLP. Alvarez & Marsal North America, LLC serves as its restructuring advisor and TRS Advisors, a group within the investment banking division of Piper Sandler & Co., serves as its investment banker for the restructuring.

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