GCX to Emerge From Chapter 11 Bankruptcy After Rescue Plan
By Antony Savvas, Data Economy
November 11, 2019
The company has shelved any separate sale of the company, with its largest secured lenders instead taking over the reins while also lending further.
Bankrupt Global Cloud Xchange (GCX) has announced that “after completing the initial phase of its previously announced sale process”, it is emerging from Chapter 11 bankruptcy protection.
GCX says it has decided the “best way to maximise value and position the businesses for long-term growth and success” is through a “standalone Plan of Reorganisation”.
Under the terms of the proposed Plan, which was first floated on 15 September 2019 and which has received support from more than 75% of the company’s lenders, GCX will reduce debt by $150m. It will also access new working capital and emerge as an independent company “backed by the strong ownership of its existing senior secured noteholders”, it said.
GCX, whose 68,000km network carries the data of telcos, enterprises and media firms, is owned by India’s Reliance Communications which is also undergoing an insolvency process.
Following its decision to move forward as a standalone company, GCX has terminated the sale process for the company. A US court hearing to gain confirmation for the standalone Plan is scheduled for 4 December 2019, and the company expects to emerge from its Chapter 11 restructuring shortly thereafter.
“While we had a responsibility to evaluate all potential opportunities, we are thrilled to move forward as an independent company supported by a group of existing lenders that believe in our team and the opportunities ahead of us,” said Bill Barney, chairman and CEO of GCX.
“We are confident this ownership structure – and the additional financial strength it provides – will allow us to continue to honour our commitments to employees, customers and suppliers, build upon our strategic plan and emerge as an even stronger company.”
GCX’s private undersea cable system connects to 40 key business markets worldwide spanning Asia, North America, Europe and the Middle East.