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UniTek Reaches Agreement on Comprehensive Debt Restructuring

October 22, 2014, 07:14 AM
Filed Under: Bankruptcy
Related: Restructring, Unitek

UniTek Global Services, Inc. announced that the Company and its Lenders, including affiliates of Littlejohn & Co. and New Mountain Finance Corporation (the "Lenders") have agreed to the terms of a comprehensive debt restructuring (the "Restructuring").

The Restructuring will allow the Company to continue honoring its obligations and responsibilities to its employees, customers, and vendors in the ordinary course of business, while significantly reducing its debt, reorganizing other financial obligations, and creating a strong financial foundation for the Company's future. To implement the Restructuring, the Company intends to file a voluntary petition for a "Pre-Packaged" Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, which will be filed prior to November 11, 2014. In the filing, the Company plans to request a hearing to approve the Restructuring and to set an expedited schedule for the Company's emergence from Chapter 11.

The terms of the Restructuring provide for a substantial reduction of secured debt through a debt-for-equity "swap" of over 40% as well as a substantial reduction in cash interest rate. In addition, the Lenders have agreed to advance up to $43 million of new capital to support the Company's recapitalization. All valid unsecured creditors' claims on UniTek and its subsidiaries will be assumed in the ordinary course of business and unimpaired.

Concurrently, the Lenders, as well as UniTek's largest customer, DIRECTV, have entered into a Plan Support Agreement in support of the Restructuring. "We are pleased that the Company has taken steps to improve its financial profile. We value our relationship with UniTek and look forward to continuing our partnership," stated Dave Baker, Senior Vice President of DIRECTV.

Upon completion of the Restructuring, UniTek will become a private company entirely owned by its Lenders, the largest of which have leading private equity practices, as well as deep relationships in the specialty contracting and fulfillment services industries.

"We are very pleased to have the support of the Lenders in the steps we have taken to improve our balance sheet and, through it, the long-term health of our Company," said Rocky Romanella, Chief Executive Officer. "As a result of this Restructuring, we will be positioned as a financially sound competitor in the industries UniTek serves. We have taken steps to diminish the impact of this process on our vendors, customers and employees, and we intend to move forward as expeditiously as possible to complete the Restructuring."

UniTek Global Services is a leading provider of communications infrastructure solutions, leveraging a longstanding reputation for innovation and safety to connect individuals, businesses, government agencies and communities.

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