GTT infrastructure continue to not offered as it announces individual bankruptcy
06 September 2021 | Alan Burkitt-Grey
The remains of GTT Communications are to go into chapter 11 personal bankruptcy safety, the moment it has accomplished the US$2.15 billion sale of its infrastructure operations to a private fairness enterprise.
But that deal, very first declared in October 2020, is still not finish, it is now very clear.

GTT reported in a submitting that as soon as it has closed the sale to Miami-primarily based I Squared Capital (ISQ) it will file a pre-packaged chapter 11 circumstance with the US Individual bankruptcy Court for the Southern District of New York.

CEO Ernie Ortega (pictured) claimed: “This world wide arrangement between every of our creditor constituencies resulted from comprehensive negotiations and displays the ongoing motivation of our debtholders to the enterprise.”

He extra: “Our efficiency has been strong 12 months-to-date, and we have a very aggressive product or service portfolio in growing segments of the market place, this sort of as SD-WAN. To go on this momentum, we are functioning with each other with our debtholders to make improvements to GTT’s economical health and fitness and this is a key milestone to accomplish this purpose.”

The chapter 11 announcement came as most Us residents were being heading off for a long weekend such as today’s Labor Working day holiday. That also signifies that no a single is about in GTT or ISQ to throw much more mild on the deal.

By the stop of Friday, when US markets closed for a few days, investors valued GTT at a sector capitalisation of a lot less than $23 million, scarcely 1% of what ISQ is spending for the infrastructure.

The New York Stock Trade (NYSE) delisted GTT’s shares in July because the firm had unsuccessful to file any quarterly and yearly effects due to the fact the conclude of June 2020. It still hasn’t. Practically nothing has been filed given that the first quarter 2020 benefits, introduced in May possibly 2020.

Faced with exclusion from the NYSE, GTT moved to the over-the-counter market place, but observed its shares collapse further from $3.09 in July 2021 to $.39 at Friday’s near.

In the earlier 12 months shares have been on a downward slope since hitting a peak for that period of $6.33 a 12 months in the past.

But go back to March 2018, when then CEO Rick Calder and the government chairman Brian Thompson were being at the height of their acquisition spree, the shares were being buying and selling at $60.25.

Calder still left the enterprise last 12 months, but Thompson, who started GTT as Worldwide Telecom and Engineering in 2005, is nevertheless government chairman.

GTT produced it very clear that the sale of the infrastructure division is still not entire. It claimed: “The organization expects to expeditiously near the earlier introduced sale of its infrastructure division to I Squared Money in the coming weeks, which will allow GTT to repay a sizeable part of its secured financial debt.”

It has signed a restructuring help arrangement “with essential stakeholders”, including ISQ and its lenders, “to employ a thorough restructuring of the company’s remaining stability sheet adhering to completion of the pending sale of its infrastructure division”.

GTT’s filing with the US economic regulator, the Securities and Trade Fee (SEC), suggests this arrangement covers the sale of functions providing “Pan-European, North American, sub-sea, and trans-Atlantic fiber network and facts center infrastructure services”.

These appear mainly to be the infrastructure GTT acquired by means of the acquire of Hibernia Networks in January 2017 for $590 million, Interoute, in February 2018 for $2.3 billion, and KPN International, purchased in July 2019 for €50 million ($59 million).

ISQ is purchasing the functions by a auto established up on 8 Oct 2020 known as Cube Telecom Europe, registered in a making following to the Lender of England in London. Key persons incorporate Mohamed Adel El-Gazzar, a London-based mostly spouse at ISQ who spoke to Capacity just after the deal was introduced in October.

At the time he stated that ISQ ideas to broaden the small business, which contains the infrastructure and facts centre operations of the previous Interoute, as effectively as Hibernia Networks and the previous KPN International. “We want to link to more recent towns or details centre clusters with incremental capex,” he explained.

But, he said at the time, ISQ will not merge it with Hong Kong-centered HGC Worldwide Communications, which it acquired for $1.9 billion in 2017.

Final thirty day period ISQ agreed to commit a noted $1 billion on Mexican firm KIO Networks, which owns 11 main facts centre campuses and 11 edge services, with in excess of 20MW of mounted operational capability.

KIO Networks has information centres in Mexico, central The united states, the Caribbean and Spain, in accordance to the company’s personal web site. Launched in 2002 with 100% Mexican capital, it now operates “more than 40 higher-density and significant-availability details centres”, says the site.



