CYXT - Cyxtera stock dips amid starting Chapter 11 proceedings

2023-06-05 05:05:46 ET

Cyxtera ( NASDAQ: CYXT ) and some of its subsidiaries a started a court-supervised process under Chapter 11 of the U.S. Bankruptcy Code, pursuant to a restructuring agreement with certain of its lenders.

The company said it expects to use the Chapter 11 process — started in the U.S. Bankruptcy Court for the District of New Jersey — to bolster its financial position, deleverage its balance sheet and help with the business' long-term success.

"Together with our Lenders, we determined that initiating this process is the best path forward for Cyxtera and our stakeholders as we pursue new opportunities for growth," said Cyxtera's CEO Nelson Fonseca.

Cyxtera noted that received a commitment for $200M in debtor-in-possession financing from certain of term lenders, which is convertible into an exit facility after the company emerges from the court-supervised process.

The financing is expected to help ongoing operations and continue meeting customer demand for data center platform, according to the company.

Cyxtera added that it is continuing to pursue a potential sale of the business or an investment from a new investor.

Cyxtera noted that its subsidiaries in Germany, Singapore and the U.K. are not included in the court-supervised process.

CYXT -12.19% to $0.14 premarket May 5

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