Colocation firm INAP files for Chapter 11 Bankruptcy with support from group of lenders
The company said the decision was made in order to equip the company with the tools to generate the cash flows needed to grow the business and reinvest.
Colocation provider Internap Corporation (INAP) (NASDAQ: INAP) has announced definitive steps to reduce its debt and extend maturities by filing for Chapter 11 Bankruptcy.
The company entered into a Restructuring Support Agreement with an ad hoc lender group holding approximately 77% of its outstanding term loans.
INAP and each of its U.S. subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, with the support of the Ad Hoc Lender Group.
The company said it has filed customary motions that will allow it to maintain employee wage and benefit programs, customer programs and vendor payments for goods and services delivered in the ordinary course.
INAP has requested authority to pay all pre-petition trade payables in the ordinary course throughout the Chapter 11 process.
“INAP has been exploring strategic alternatives and financial initiatives to best position the Company in an ever-evolving IT infrastructure landscape,” said Peter Aquino, Chairman and Chief Executive Officer, INAP.
“After a thoughtful evaluation of all available options, today, we are taking decisive action to strengthen our capital structure.
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“We expect to emerge quickly, financially stronger and well-positioned to deliver our comprehensive portfolio of premium data centre infrastructure, best-in-class cloud solutions and high-performance network services well into the future.”
The Ad Hoc Lender Group has committed to providing the company with debtor-in-possession (DIP) financing of $75 million.
This financing, combined with INAP’s existing operating cash flows, will allow all of INAP’s businesses to continue operating as usual and position the company to drive future growth.
The company’s plan of reorganisation, which is under solicitation with lenders, anticipates INAP will emerge from this process as a private company with an improved strategic and financial position.
“We appreciate the support we have received from our existing lender group, which underscores their belief in our business and commitment to its growth,” added Michael Sicoli, President and Chief Financial Officer.
“We look forward to working with them closely as we move ahead to invest in our business to meet the ever-growing demands of our customers and channel partners.”
INAP’s non-U.S. subsidiaries, including iWeb Technologies, Internap Network Services U.K. Limited, Internap Network Services B.V., SingleHop B.V. and INAP Japan, are not part of the company’s Chapter 11 cases.
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