Internap Corporation announced definitive steps through which it expects to significantly reduce debt and extend maturities, equipping INAP to generate the cash flows needed to grow the business and reinvest in its products and customers. To support this strengthening of its capital structure, INAP entered into a Restructuring Support Agreement (the “RSA”) with an ad hoc lender group (the “Ad Hoc Lender Group”) holding approximately 77% of its outstanding term loans. With the support from the Ad Hoc Lender Group, INAP and each of its U.S. subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.
“INAP has been exploring strategic alternatives and financial initiatives to best position the Company in an ever-evolving IT infrastructure landscape. After a thoughtful evaluation of all available options, today, we are taking decisive action to strengthen our capital structure,” said Peter Aquino, Chairman, and Chief Executive Officer. “We expect to emerge quickly, financially stronger and well-positioned to deliver our comprehensive portfolio of premium data center infrastructure, best-in-class cloud solutions, and high-performance network services well into the future.”
The Ad Hoc Lender Group has committed to providing the Company with debtor-in-possession (DIP) financing of $75 million. This financing, combined with INAP’s existing operating cash flows, will allow all of INAP’s businesses to continue operating as usual and position the Company to drive future growth. The Company’s Plan of Reorganization, which is under solicitation with lenders, anticipates INAP will emerge from this process expeditiously as a private company with a significantly improved strategic and financial position.
“We appreciate the support we have received from our existing lender group, which underscores their belief in our business and commitment to its growth,” added Michael Sicoli, President and Chief Financial Officer. “We look forward to working with them closely as we move ahead to invest in our business to meet the ever-growing demands of our customers and channel partners.”
The Company has filed customary motions that will allow it to maintain employee wage and benefit programs, customer programs and vendor payments for goods and services delivered in the ordinary course, all of which are typical in the Chapter 11 process and subject to Court approval. INAP expects these motions will be heard in the first few days of its case. Further, INAP has requested authority to pay all pre-petition trade payables in the ordinary course throughout the Chapter 11 process.
INAP’s non-U.S. subsidiaries, including iWeb Technologies, Internap Network Services U.K. Limited, Internap Network Services B.V., SingleHop B.V., and INAP Japan, are not part of the Company’s Chapter 11 cases but are expected to benefit from the Company’s improved financial structure.