Speedcast has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, the company announced Thursday. Speedcast said that pressures on the oil and gas and maritime industries, coupled with the COVID-19 pandemic led to the decision.
Many of Speedcast’s customers in the maritime and oil and gas industries have been experiencing headwinds, and its cruise line customers were recently impacted by the COIVD-19 pandemic. The company said in a release that these dynamics made it impossible to complete a planned equity raise outside of Chapter 11.
The company has received up to $90 million in commitments for new money debtor-in-possession financing from the holders of its outstanding term loan debt to help meet its commitments throughout restructuring. Speedcast said it plans to continue global operations uninterrupted during Chapter 11, and intends to continue to pay its employees. The company hopes to have the Chapter 11 process completed by the end of August.
According to the bankruptcy filing, Speedcast’s leading creditors are Intelsat and Inmarsat, with claims of $44.8 million and $23.4 million, respectively.
Speedcast CEO and Executive Director Peter Shaper emphasized that this decision was made to strengthen the company’s financial position.
“We are confident we will be well positioned to maximize the full potential of our expanded platform as a result of the actions we’re taking now to align our balance sheet strength with our clear industry leadership,” Shaper said in a release. “We expect to be a stronger business partner and employer as result of the additional financing our existing lenders have committed, based on their strong belief in our go-forward potential.”
This decision comes after the company’s CEO PJ Beylier resigned in February after 2019 was a “challenging” year financially for the company. At the time, Beylier said he took responsibility for the fact that the company’s 2019 financials were not in line with the Board of Directors’ expectations.