Anil Ambani-led Reliance Communications on Wednesday said that its subsidiary Global Cloud Xchange (GCX), which has filed for bankruptcy protection in a US court, plans to reduce its bond debt by $150 million.
"GCX has announced a pre-packaged plan of reorganisation that will support its long-term growth and development by reducing bond debt by $150 million, providing a permanent capital structure that includes working capital facility and transitioning the business to new ownership," RCom said in a filing to the Bombay Stock Exchange.
GCX, which owns the world's largest private sub-sea cable system, filed for bankruptcy protection in a US court on September 15 after it missed payments on its $350 million of 7% bonds that matured earlier in August. The company has announced a pre-packaged restructuring with support from more than 75 per cent of its lenders, through which GCX's senior secured note-holders would become owners of GCX and provide new loans to support and grow the business.
"In a bid to ensure GCX maximises value for its stakeholders in this process, the company will also use the protections and framework of Chapter 11 to undertake a sale process that welcomes additional prospective buyers," RCom said in the exchange filing.
GCX expects to complete the Chapter 11 process within the fourth quarter of 2019, subject to all required regulatory approvals. It said that customers, suppliers and employees will work with all GCX entities as usual throughout the Chapter 11 process.
"The plan does not contemplate any changes in business arrangements or activities for any GCX subsidiary, and according to the terms of the plan, all trade/vendor claims will be paid in full," RCom said.
GCX has also filed the customary motions as part of its Chapter 11 case to compensate employees as usual, maintain its usual programs for customers and partners, and otherwise operate its business as usual.
"We appreciate the strong collaboration with our lenders, which has resulted in a Plan of Reorganization that allows us to honor our commitments to employees, customers and suppliers while also securing a financially strong future for our business," said Bill Barney, Chairman and CEO of GCX.
"We are a fundamentally strong company, providing mission-critical, expertly managed network solutions for telecommunications, global enterprise and OTT customers. The steps we are announcing today will allow us to continue to build on our strengths and emerge as an even stronger employer and business partner," Barney added.
Edited by Chitranjan Kumar