BY Fraser Tennant
RiverStreet, a telecommunications and broadband services provider based in Virginia, has filed for Chapter 11 bankruptcy protection to facilitate an asset purchase agreement (APA) with funds managed by Oaktree Capital Management.
The bankruptcy filing encompasses 21 entities, including RiverStreet Communications, RiverStreet Networks, RiverStreet Wireless, and several regional telephone and communications companies.
The new ownership is expected to significantly strengthen RiverStreet’s financial foundation and provide additional resources to support its long-term success, allowing the company to continue to provide reliable telecommunications and broadband services to all its customers without interruption.
Additionally, RiverStreet is currently implementing a modified build plan that refocuses its operations on its existing customers and footprint. Under this plan, RiverStreet maintains its current networks and intends to finish new builds that are nearing completion.
At the same time, the company – which serves customers in more than 67 counties in three states, primarily in North Carolina and Virginia – intends to transition certain unfinished expansion projects to other qualified broadband providers.
“The APA with Oaktree and the actions we are taking today are intended to ensure that this mission continues for years to come,” said Eric Cramer, president and chief executive of RiverStreet. “The board of directors and management team carefully considered a range of options before making this decision.”
To support the company during the court-supervised proceedings, RiverStreet has appointed Stuart Kaufman as chief restructuring officer. Mr Kaufman is a senior managing director at Areté Partners, LLC with more than three decades of financial restructuring experience and deep financial and operational expertise.
“We are confident that this is the best path for RiverStreet and our key stakeholders, including our customers and the communities where we live and work,” he continued. “We look forward to completing this process and entering a new phase as a stronger rural broadband provider with new owners, substantially less debt, and greater financial flexibility.”
In connection with the court-supervised sale process, RiverStreet has received a commitment for approximately $20m in new financing from its existing lender, CoBank, ACB. Upon court approval, this new financing, together with cash generated from ongoing operations, will support the company’s operations throughout the Chapter 11 proceedings.
Evan Kramer, senior vice president at Oaktree, added: “We look forward to building on RiverStreet’s strengths while remaining true to its mission as a leading rural telecommunications and broadband provider.”
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