Speedcast receives confirmation of Chapter 11 plan of reorganization

By Sarah Lizee

Olympia, Wash., Jan. 25 – Speedcast International Ltd.’s joint Chapter 11 plan of reorganization was confirmed on Friday by the U.S. Bankruptcy Court for the Southern District of Texas.

The company said in a press release that it is poised to emerge with a significantly strengthened balance sheet and the support of Centerbridge Partners, LP and its affiliates as its new owner.

Joe Spytek will take on the role of Speedcast’s chief executive officer, leading the company upon emergence under the new Centerbridge ownership. Spytek has served as Speedcast’s president and chief commercial officer for the last year after being tapped to join the organization to help implement its turnaround.

Under the terms of the plan, Speedcast is set to emerge with a new $500 million equity investment from Centerbridge, which will be used in part to repay all of its $285 million debtor-in-possession financing, as well as a permanent reduction of all of the $634 million senior secured debt of the company.

The plan provides for at least a $150 million recovery for holders of allowed syndicated facility secured claims, a $25 million recovery to holders of unsecured trade claims and establishment of a litigation trust for the benefit of other unsecured claims.

Holders of other priority claims will receive cash equal to the amount of their claims.

Holders of other secured claims will receive cash equal to the amount of their claims, have their claims reinstated or receive other treatment sufficient to render their claims unimpaired.

All intercompany claims will be adjusted, continued, settled, reinstated, discharged, eliminated or otherwise managed.

Holders of subordinated claims will not receive or retain any property.

Parent interests will be canceled with no distribution.

At the option of the reorganized debtors, in consultation with the plan sponsor, all allowed intercompany interests will either remain unaffected by the plan and continue in place or be canceled, and holders will not receive or retain any property.

Speedcast is advised by Weil, Gotshal & Manges LLP as global legal counsel and Herbert Smith Freehills as co-counsel. Michael Healy of FTI Consulting, Inc. is Speedcast’s chief restructuring officer, and FTI Consulting, Inc. is Speedcast’s financial and operational adviser. Moelis Australia Advisory Pty. Ltd. and Moelis & Co. LLC are Speedcast’s investment bankers. KCC is Speedcast’s claims and noticing agent. Centerbridge is advised by Wachtell, Lipton, Rosen & Katz.

Speedcast is a Sydney, Australia-based provider of remote communication and IT solutions. The company filed bankruptcy on April 23, 2020 under Chapter 11 case number 20-32243.

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