Signs Forbearance Agreement with Lender Group
- Speedcast has signed a Forbearance Agreement with its lender group in relation to certain obligations due 31 March 2020, and a potential covenant breach for the period to 31 December 2019
- Speedcast continues to progress discussions with its lender group for an interim funding package, as part of an overall restructuring of the Company's balance sheet
- Speedcast remains committed to working with its customers and suppliers through this unprecedented period to ensure continuity of their critical telecommunications services
During the course of finalising Speedcast's FY19 results, it became apparent that it was likely that the Company would not satisfy the net leverage covenant under its Syndicated Facility Agreement (SFA) as at 31 December 2019 (with that covenant calculation due to be provided to the lenders by the end of April). In addition, the impacts from the global COVID-19 coronavirus pandemic are being felt across the business, and current equity market conditions precluded a meaningful equity raising to support a recapitalisation.
Accordingly, the Company has negotiated a Forbearance Agreement under the SFA by which its lenders would provide temporary forbearance of actions under the SFA as a result of the breach, and other breaches including the non-payment of interest and amortisation as of 31 March 2020.
The Forbearance Agreement is intended to assist with the Company's liquidity position, to provide stability and to allow ongoing trading while the terms of the interim funding are finalised. Speedcast continues to progress discussions with its lender group to implement an interim funding package to allow the Company to continue operating and progress its recapitalisation and restructuring to reduce the overall leverage of the Company.
The Forbearance Agreement is scheduled to expire on 17 April 2020, and includes customary provisions that require Speedcast to continue to operate as far as possible, in the ordinary course.
Speedcast remains committed to working with its customers and suppliers through this unprecedented period to ensure continuity of the critical telecommunications services it provides.
About Speedcast International Ltd
Speedcast International Ltd (ASX:SDA) is the world's largest remote communications and IT services provider. The company delivers critical communications solutions through its multi-access technology, multi-band and multi-orbit network of 80+ satellites and an interconnecting global terrestrial network, bolstered by extensive local support from 40+ countries. Speedcast is uniquely positioned as a strategic partner, tailoring communications, IT and digital solutions to meet customer needs and enable business transformation. The company provides managed information services with differentiated technology offerings, including cybersecurity, crew welfare, content solutions, data and voice applications, IoT solutions and network systems integration services. With a passionate customer focus and a strong safety culture, Speedcast serves more than 3,200 customers in over 140 countries in sectors such as Maritime, Energy, Mining, Enterprise, Media, Cruise, Humanitarian and Government. Learn more at Speedcast.
Speedcast International Ltd