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- Windstream on Monday filed for bankruptcy reorganization under Chapter 11.
- The decision came after Windstream lost a court battle with Aurelius Capital Management over whether it defaulted on its bonds in 2015 by spinning off Uniti Group.
- Windstream said it choose to take this proactive reorganization step to ensure its operational momentum.
- The company said it has received a commitment from Citigroup for $1 billion of financing to get it through bankruptcy.
Windstream, a provider of broadband and other data network communications, plunged 43% to $0.49 a share Monday after the company filed bankruptcy reorganization under Chapter 11.
The decision came after Windstream lost a court battle with Aurelius Capital Management over whether it defaulted on its bonds in 2015 by spinning off Uniti Group. The company chose to use the court-supervised process to address debt maturities that have been accelerated as a result of the recent decision by Judge Jesse Furman in the Southern District of New York against Windstream, according to a statement.
Windstream said it has received a commitment from Citigroup for $1 billion of financing to get it through bankruptcy.
"Following a comprehensive review of our options, including an appeal, the Board of Directors and management team determined that filing for voluntary Chapter 11 protection is a necessary step to address the financial impact of Judge Furman’s decision and the impact it would have on consumers and businesses across the states in which we operate," said CEO Tony Thomas.
"Taking this proactive step will ensure that Windstream has access to the capital and resources we need to continue building on Windstream’s strong operational momentum while we engage in constructive discussions with our creditors regarding the terms of a consensual plan of reorganization."
One year ago, Windstream was trading at about $8 a share.
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Source: Business Insider – ejiang@businessinsider.com (Ethel Jiang)