Windstream Holdings, Inc. announced June 25 that the U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan of reorganization. If the process proceeds as planned, Windstream says it will emerge from Chapter 11 as a privately held company in late August of this year.
Windstream filed for Chapter 11 protection February 25, 2019 and reached a Plan Support Agreement with its first lien creditors in early March (see “Windstream Holdings files for Chapter 11 bankruptcy, pledges to continue operations” and “Windstream reaches financial restructuring agreement with creditors”). It also reached an agreement with Uniti Group that halted litigation between the two firms and will see Uniti purchase some Windstream assets. The February 2019 filing came after Southern District Court of New York ruled in favor of a suit filed by Aurelius Capital Management and U.S. Bank National Association that Windstream Services, LLC’s 2015 spinoff of certain telecommunications network assets into a real estate investment trust (REIT) violated its agreements with bondholders (see "Windstream plans REIT to own fiber and copper networks").
The restructuring plan will shave approximately $4 billion (about two-thirds) off Windstream’s debt load while providing access to approximately $2 billion in new capital. Windstream plans to use the funds to extend gigabit internet services to rural customers and support its SD-WAN and UCaaS offerings for enterprise customers.
“We were able to reach this important milestone thanks to the support of our financial stakeholders, as well as our customers, vendors and business partners. The court’s confirmation of our plan puts us on a definitive path to emerge from restructuring with a stronger balance sheet and healthy liquidity position to continue making network and software investments for the benefit of our customers,” said Tony Thomas, Windstream’s president and CEO. “I want to thank the entire Windstream team for remaining focused on our customers and for tirelessly providing essential communications services during the reorganization process.
“We look forward to beginning this new chapter for Windstream,” Thomas continued. “When we emerge, our lenders will become our new owners and strategic partners and are aligned with our long-term strategy and mission to deliver quality and reliable services. As a private company, Windstream will have increased flexibility to invest in our network, accelerate our transformation and return to growth. Together, we will emerge from this process as a stronger company able to successfully compete in the communications marketplace.”
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