GTT Communications to file for Chapter 11 bankruptcy
McLean company plans to file after closing sale of infrastructure division
McLean-based telecommunications company GTT Communications Inc. is planning to file a prepackaged chapter 11 case after it closes the previously announced sale of its infrastructure division to Miami-based I Squared Capital, it announced Thursday.
After the completion of the $2.15 billion sale, GTT and some subsidiaries will file their cases in the U.S. Bankruptcy Court for the Southern District of New York. A Chapter 11 filing, or “reorganization” bankruptcy, allows the company to continue to operate its business. GTT’s operations outside the U.S. will be unaffected.
The company said it expected to continue operating without interruption. The restructuring support agreement it signed with stakeholders, including I Squared Capital, provides for payment of vendors, employees and other partners for costs incurred in the ordinary course of business. GTT stated it has sufficient liquidity to operate, and with the support of its lenders, will retain money from the infrastructure division sale.
In a statement, GTT CEO Ernie Ortega said, “This global agreement among each of our creditor constituencies resulted from extensive negotiations and reflects the ongoing commitment of our debtholders to the business. … To continue [our] momentum, we are working together with our debtholders to improve GTT’s financial health, and this is a major milestone to accomplish this goal.”
Founded in 1998, GTT specializes in Tier 1 internet network and cloud networking services.