Back on the 22 December 2019, Seabras 1 USA LLC and Seabras 1 Bermuda Ltd (the two companies) filed to voluntarily enter in Chapter 11 of the United States Bankruptcy Code.
While Seabon Networks, the operator of the Seabras-1 cable system, was not included in the filings and has continued to operate as it has been.
At the time, the group cited “an underwhelming number of customer contracts” as the reason it was filing as it was unable to make payments on its $150 million debt.
According to the Wall Street Journal, the company has further pointed to “severe price drops” on the Seabras-1 cable system between New York and São Paulo, as one of the reasons for its predicament. Resulting in customers buying smaller amounts of capacity on the for shorter leases, paid monthly, rather than the previously expected large-scale “front-end payments”.
There has also been links to added competition from a newer cable operator in the region and the “economic turmoil arising from the so-called Car Wash corruption scandal that has engulfed Brazilian business and political leaders,” says the Wall Street Journal
As a result, on 30 June 2020, a hearing was held in which the US Bankruptcy Court for the Southern District of New York confirmed the joint plan of reorganisation of Seabras 1 USA LLC and Seabras 1 Bermuda Ltd.
Under the terms of the new plan and restructuring, the outstanding debt of the two companies has been reduced, the date in which the debt it due to fully paid has also been extended by approximately six years to September 2028.
"We are excited about the future and sincerely thank all of our employees, customers, providers and other business partners for their continued commitment to the company”, said Andy Bax, co-founder and chief operating officer of Seaborn.
“Our world-class team will continue to work hard to deliver innovative advancements and new, industry-leading solutions for our customers and partners for years to come."
Additionally, the debt re-payment plan has been re-shaped, and the debt covenants have been revised, all according to the company, “in a way that provides a solid basis for the continued growth of the business going forward”.
In addition, all Class A shares of Seabras Group LLC and its subsidiaries including the two companies, have been acquired from SNH Networks (formerly known as Seaborn Networks Holdings, LLC) by entities managed by global private markets investment manager, Partners Group, on behalf of its clients.
On the same day Seabras Bermuda acquired 100% of Seaborn Management, a third-party services provider that manages the day-to-day operations of the Seabras-1 cable, also from SNH Networks.
Essentially, bringing together all Seaborn and Seabras entities under the newly consolidated Seabras Group, under the ownership and management of Partners Group.
“We believe that Seaborn’s technology-driven, client-first approach and advanced delivery solutions are best-in-class,” said Todd Bright, partner and head of private infrastructure Americas at Partners Group, a global private markets investment manager and owner of Seaborn on behalf of its clients.
“We will continue to work side-by-side with Seaborn as a value-added investor to help the company meet the needs of its customers now and in the future.”
Coinciding with the completion of the consolidation and restructuring, Larry Schwartz, former CEO of Seaborn, and Roger Kuebel, former CFO of Seaborn, have left Seaborn and the Seabras Group.
In the interim, Pete Hayes and Don Shassian, members of the Partners Group-appointed Board, will serve as Interim CEO and Interim CFO, of the Seabras Group. While Andy Bax, the COO of Seaborn, will remain in the same role.
This comes at a time of a major reorganisation in the industry. Today HKT is considering the future of PCCW Global.
For more on this story, listen to The Digital Digest, Episode 11
