Telecommunications contractor QualTek announced on Friday that it has emerged from bankruptcy after it reduced its debt by about $307 million through a restructuring deal. This debt reduction is expected to give the Company the flexibility to invest in growth and strengthen its financial position in the future. The Company will operate as a privately-held company under the ownership of its lenders and management. Its shares are no longer publicly traded. The Company will be led by its existing management team alongside a newly-formed board of directors.
The Company filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas in May this year. It was armed with a restructuring agreement to cut its debt and provide $40 million in new loans to fund its post-bankruptcy operations. The reorganization plan was supported by all major credit stakeholders, including the Company’s prepetition secured creditors, unsecured creditors, and convertible noteholders. The Company received commitments from its DIP lender group to provide a $101 million exit ABL facility and $25 million of new money exit term loans in connection with the Plan.
During the Chapter 11 process, the Company was focused on stabilizing its business and securing adequate funding to pay vendors and staff through the reorganization period. The Company also reduced its interest expense by over $80 million through the Chapter 11 proceedings.
The Company will continue to focus on its core service offerings and provide high-quality solutions that drive customer satisfaction. The new ownership structure and the existing management team will be positioned to capitalize on the Company’s strong industry expertise to drive post-bankruptcy growth.
QualTek Services is a leading infrastructure services provider, supporting networks and systems for broadband providers, carriers, enterprise businesses, and utilities. The Company provides wireless backhaul and last-mile infrastructure, network optimization and design services, fiber optic and data center connectivity and management, and other value-added products and services to a diverse range of customers nationwide. The Company has offices in the United States and Canada.
This press release contains forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. All such statements, including but not limited to those relating to the Company’s ability to successfully consummate the Restructuring and emerge from the Chapter 11 Cases, the potential impact of the Chapter 11 Cases on the liquidity and results of operations, the Company’s ability to secure a DIP facility claim for the Restructuring, and other related matters, are based on management’s current expectations and assumptions as of the date of this press release. These statements are subject to certain risks and uncertainties that could cause results to differ materially from those described in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to:
The information in this press release should be read with the more detailed risk factors in QualTek’s filings with the Securities and Exchange Commission.
