Fixed wireless provider Starry has filed voluntary petitions for Chapter 11 relief in the U.S. Bankruptcy Court for the District of Delaware. The company said it has entered into a restructuring support agreement with lenders.
That agreement includes “agreed-upon terms for a pre-packaged financial restructuring plan that is expected to significantly reduce the company’s debt, optimize the company’s capital structure and liquidity, and ultimately, better position Starry for success,” the company said in a press release.
Starry said it will continue to operate as usual in its core markets of Boston, New York City, Los Angeles, Denver and Washington, DC. and plans to “move swiftly through the restructuring process.”
Starry’s business model has been to offer high-speed broadband using fixed wireless to multi-dwelling units. The company had ambitious expansion plans that included using Rural Digital Opportunity Fund (RDOF) money to make service available in unserved and underserved areas.
But those plans were abandoned after an unsuccessful initial public offering.
“With the support of our lenders, we feel confident in our ability to successfully exit this process as a stronger company, well-positioned to continue delivering an affordable, high-quality broadband experience to our customers,” said Chet Kanojia, Starry’s Chief Executive Officer, in today’s press release.
“The Restructuring Support Agreement provides us with the funding needed to continue operating as normal, through this restructuring process and as we guide the company to profitability,” he continued. “We have a strong and experienced team in place and look forward to moving through this process quickly so that we can continue expanding essential broadband access . . . to more communities.”
Starry said it has filed various “first day” motions requesting customary relief, including a motion for approval of $43 million in debtor-in-possession financing that is expected to enable the company to continue its normal business operations and meet its post-filing obligations to employees, customers and vendors.
The company “anticipates closing on a debt-for-equity restructuring with the lenders but will first conduct a marketing and auction process to identify any other potential bidders for its business,” according to today’s release.
Starry also noted that it will continue to support the Affordable Connectivity Program, along with its own low-income program, Starry Connect, which is available to consumers living in public and affordable housing communities.