Broadband provider Starry Group Holdings, Inc. (OTCPK: STRY) said it’s filed for Chapter 11 bankruptcy protection as it pursues a restructuring plan and possible buyer. The company said the restructuring plan agreed to with its lenders would “significantly” lower its debt.
The licensed fixed wireless technology developer and internet service provider has $310 million in debt and $271 million in assets. Starry is also asking the court to approve a $43 million debtor-in-possession financing facility to provide liquidity for the company to do business, according to Seeking Alpha.
Starry added that before it closes on the financing, it intends to pursue a sale or auction of its business. For now, it plans to continue normal customer and network operations in its core markets of Boston, New York City, Los Angeles, Denver and Washington, D.C.
The company plans to move swiftly through the restructuring process. “Over the last several months, we’ve taken steps to conserve capital and reduce costs in order to put Starry in the best position to explore various financing paths for the company,” said Starry CEO Chet Kanojia. “Our next step in this journey is to continue to strengthen our balance sheet through a Chapter 11 restructuring process.”
In January, Starry said it was pulling out of Columbus, OH, and laying off 24 percent of its workforce, which amounted to around 100 jobs, noted Seeking Alpha. Starry cut its workforce by approximately 50 percent in October due to what it called a “difficult economic climate.” The broadband provider said at the time it was pursuing “strategic options” for the firm.
In October, Starry defaulted on bids totaling about $269 million in the FCC’s Rural Digital Opportunity Fund (RDOF) auction, Inside Towers reported. It was one of the top 10 bidders. The default happened just weeks after the Commission said it was ready to authorize Starry winning RDOF bids in eight states.
Starry’s stock has traded below $1 since that announcement after reaching a 52-week high of $10.90 on June 3, noted Seeking Alpha. The company went public last March 29, through a merger with SPAC FirstMark Horizon.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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