UniTek Global granted confirmation of prepackaged restructuring plan

By Kali Hays

New York, Jan. 5 – UniTek Global Services, Inc. received confirmation of its prepackaged Chapter 11 plan of reorganization and approval of the related disclosure statement on Monday from the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, at the end of October UniTek announced that it reached an agreement with its lenders, including affiliates of Littlejohn & Co. and New Mountain Capital, on the terms of a comprehensive debt restructuring.

UniTek said the restructuring would allow it to continue honoring its obligations and responsibilities to its employees, customers and vendors in the ordinary course of business, while significantly reducing its debt, reorganizing other financial obligations and creating a strong financial foundation for the company’s future.

The company said in a prior news release that it obtained votes in favor of the plan from all members of all three classes entitled to vote.

In early December, UniTek received final court approval to access a debtor-in-possession facility comprised of up to $43 million of term advances and use of cash collateral. The loan includes $10 million of revolving commitments and a $3.7 million letter-of-credit roll-up.

Restructuring terms

Specifically, the company said the terms of the restructuring provide for a substantial reduction of secured debt through a debt-for-equity swap of more than 40% as well as a substantial reduction in cash interest rate.

Portions of UniTek’s secured debt will be converted into a new first-lien debt facility and portions into 100% of the equity in the reorganized company.

In addition, the lenders agreed to advance up to $43 million of new capital to support UniTek’s recapitalization.

All valid unsecured claims will be assumed in the ordinary course of business and unimpaired.

Subordinated creditors and holders of existing UniTek interests will receive no distribution.

In addition to the restructuring agreement, the company, the lenders and UniTek’s largest customer, DirecTV, entered into a plan support agreement.

Under a plan support agreement with all of UniTek’s revolving and term loan lenders, the company will become a private company entirely owned by its lenders, upon completion of the restructuring.

Parties to the agreement include affiliates of PennantPark Floating Rate Capital Ltd., Cerberus Capital Management, LP and Marblegate Asset Management, LLC

UniTek, a Blue Bell, Pa.-based provider of engineering, construction management and installation fulfillment services to the telecommunications, broadband cable and satellite industries, filed for bankruptcy Nov. 3. The Chapter 11 case number is 14-12471.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.