Undersea cable firm Global Cloud Xchange, formerly Reliance Communications Ltd.'s arm, on Thursday said a U.S. court has approved its restructuring plan, clearing the way for completion of bankruptcy proceeding and becoming an independent firm.
"Global Cloud Xchange announced that the United States Bankruptcy Court for the District of Delaware has confirmed the Company's Plan of Reorganisation, clearing the way for GCX to successfully complete its Chapter 11 financial restructuring," GCX said in statement.
According to the restructuring plan, the company faced uncertainty relating to the refinancing of the $350 million Senior Secured Notes and RCom has not been meeting its obligations resulting in RCOM owing GCX and its subsidiaries approximately $145 million.
Debt-ridden RCom is currently going through insolvency proceedings in India.
"Upon its emergence from Chapter 11 following regulatory approval, GCX will be an independent company backed by the strong ownership of its existing senior secured noteholders. The company will have reduced its debt by $150 million and gained access to new working capital to further its strategic plan for the benefit of its employees, customers and business partners," GCX said.
Under the reorganisation plan, the consenting senior secured noteholders will carry only a proportion of their $366 million debt into a $200 million second lien facility, reducing their headline debt by over $150 million, GCX said.
Further, the reorganisation plan will provide liquidity to GCX to meet its capital requirement to run the business, according to the reorganisation plan note of the company.
GCX on Sept. 15 announced that it has initiated a voluntary case under Chapter 11 of the U.S. Bankruptcy Code to effectuate the plan while continuing to serve its customers as usual.
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