Announced at the start of November, GCX stated that it was to become an independent company after its Chapter 11 proceedings and once it had completed the initial phase of its previously announced sales process. Under the terms of the proposed plan, which was first announced on 15 September 2019 with support from more than 75% of the company's lenders, GCX will also reduce debt by $150 million and access new working capital.
The news comes as Reliance Communications (RCom), the legal parent company of GCX, has experienced financial woes of its own. In the disclosure statement for joint prepackaged Chapter 11 Plan of GCX Limited and its debtor affiliates, it states that:
“The Debtors have experienced a number of market factors and other unexpected challenges in recent years, including declining revenue and high costs, and have been negatively impacted by the financial distress of their ultimate parent, RCom. In the midst of these challenges, the Debtors faced a liquidity shortfall that left them unable to repay the outstanding principal and interest under their Senior Secured Notes by the Maturity Date and no ability to recapitalize the Company.”
In light of this, September saw Bill Barney step down from his position as CEO of RCom, so that he has focus on his other task, as head of GCX and its restructuring.
GCX has been advised in its restructuring by Lazard, Paul Hastings LLP and FTI Consulting and additional information on the company’s restructuring is available on the dedicated website: https://cases.primeclerk.com/gcx
