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- Satellite communications provider Speedcast International (SDA) is filling chapter 11 of the U.S. Bankruptcy Code, in an effort to stay afloat during the COVID-19 pandemic
- By filing chapter 11, the company will access approximately $141 million in debtor-in-possession financing
- Speedcast will use these funds to remain operating, pay its suppliers and uphold its obligations to employees and customers
- The company cited COVID-19’s impact on the cruise line industry, as well as in the oil and gas sector, as the motivation behind its financial restructuring
- Speedcast International shares remain suspended at 79 cents each
Speedcast International (SDA) is filling chapter 11 of the U.S. Bankruptcy Code, in an effort to stay afloat during the COVID-19 pandemic.
Through the filing, the company will access up to approximately $141 million in debtor-in-possession financing.
This kind of financing is reserved for companies that have filed chapter 11 and will allow Speedcast to continue operating, while the bankruptcy claim is processed.
With those funds secured, the company stated that it will be able to uphold its obligations to its shareholders in the near-term.
Speedcast, which provides satellite communications to a range of industries, was forced to financially restructure as a result of the ongoing COVID-19 pandemic.
A large portion of the company’s revenue comes from the oil and gas industry, which has been struggling under decreased demand and a poor oil price in recent months. The pandemic has also halted cruise line operations around the globe, another key sector in Speedcast’s portfolio.
Despite the restructuring, Speedcast will maintain its operations as normal. Furthermore, the company expects to honour its payments to suppliers, as well as any ongoing commitments to its employees and customers.
CEO and Executive Director of Speedcast, Peter Shaper believes this is the right move the company, given the present challenges facing the industry.
“The decisive actions we announced today are about strengthening our financial position through the proven legal framework that the chapter 11 process provides,” Peter described.
“We fully expect that our customers and employees, among other stakeholders, will see no change in their interactions with our company as a result of this filing. In fact, we expect to be a stronger business partner and employer as a result of the additional financing,” he said.
Speedcast International shares remain suspended at 79 cents each.
