Internap amended pre-packaged plan of reorganization effective May 8

By Caroline Salls

Pittsburgh, May 11 – Internap Technology Solutions Inc.’s amended pre-packaged plan of reorganization took effect on Friday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of New York.

The plan was confirmed on May 5.

As previously reported, the company filed bankruptcy to implement a restructuring support agreement with a group of lenders holding 77% of its outstanding term loans.

Under the restructuring term sheet, general unsecured creditors will be paid in full in the ordinary course of business.

Internap’s debtor-in-possession facility converted into a priority exit facility upon emergence from the Chapter 11 cases. The exit facility will have a three-year maturity and bear interest at a rate of Libor plus 1,000 bps.

The company will enter into a new term loan facility that will provide for term loans in the principal amount of $225 million, mature five years after the effective date and bear interest at Libor plus 650 bps, 300 bps of which will be paid in cash and 350 bps in kind; provided that, at the election of the board of directors 200 bps of the Libor plus 300 bps cash interest may be paid in kind.

The company will try to enter into a new $15 million senior secured first-out working capital facility on the plan effective date.

The lenders of the company’s 2017 credit agreement will receive 100% of the new common stock initially issued by the reorganized company.

Holders of existing common stock will receive warrants to purchase 10% of the new common stock, provided that those stockholders provide releases.

The warrants will have a strike price calculated to imply an equity value at which the holders of claims under the credit agreement recover their principal amount of debt plus pre-bankruptcy interest on their allowed loan claims.

Up to 10% of the fully diluted common stock of reorganized Internap, in the form of restricted stock grants and/or options, will be reserved for issuance under a management incentive plan.

Internap is an Atlanta-based provider of IT Infrastructure solutions. The company filed bankruptcy on March 16 under Chapter 11 case number 20-22393.

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