Restructuring Provides for Enhanced Liquidity via a $80 million Revolving Credit Facility and up to $97.5 million of New Money Investment from Existing Lenders
Transaction to be Implemented Through a Voluntary, Pre-Packaged Chapter 11 Process
Operations Continuing Without Interruption; No Impact Expected for Customers, Vendors, or Employees
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--iQor (“the Company”), a managed services provider of customer engagement and technology-enabled BPO solutions, announced today that iQor Holdings Inc. and each of its U.S. subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas to implement an agreement between a majority of its secured lenders to recapitalize its funded debt.
The Debtors have commenced these Chapter 11 cases with a pre-packaged plan of reorganization (the “Plan”) that includes the requisite stakeholder support in favor of the Plan. The Plan has the overwhelming support of the Company’s lenders, with holders of 97% of the Company's first lien notes and 84% of the Company's second lien notes already voting to approve the Plan. The company has not received any votes to reject the plan. The Company’s filing and the Plan represent an essential step to improve the Company’s financial stability and address certain upcoming debt maturities.
The Company’s Chapter 11 cases are limited to the Company’s U.S. entities and operations. International operations in the Philippines, India, Mexico, Poland, Canada, Panama, Trinidad and Hong Kong are not included in the filing. Importantly, all of iQor’s businesses, whether included in the filing or not, are operating in the ordinary course and anticipate continuing to do so throughout the duration of the Chapter 11 process, from which the Company fully expects to emerge financially stronger within approximately 45 days.
“Over the past year, iQor has explored strategic initiatives to reduce our debt load and right-size our capital structure following an ambitious acquisition that ultimately underperformed,” said Gary Praznik, President and Chief Executive Officer of iQor. “The recent steps we have taken toward achieving and executing our BPO platform strategy have moved us forward, as has our efficient response to COVID-19 disruptions. While we have made progress in rapidly expanding our end-to-end customer strategy, our capital structure remains over-levered relative to the current size of our operations. Accordingly, we determined that additional measures were necessary and in the Company’s long-term best interest as we work to reach our goals and capitalize on new opportunities.”
“Our guiding principle in making the decision to pursue an in-court restructuring is to provide iQor with the best path forward to achieve long-term stability, growth and profitability,” Mr. Praznik continued. “With the support of our lenders, today’s action is a meaningful, strategic step and the right choice to realize the full benefit of our efforts and best position iQor for future success.”
To support continuity, iQor has filed a motion seeking U.S. Bankruptcy Court approval of $130 million of debtor-in-possession (“DIP”) financing, consisting of a $80 million A/R facility and $50 million term loan, which will be available to support the Company’s ongoing operations through the restructuring process. iQor expects the DIP financings to be refinanced with a new $80 million exit A/R facility and a new exit term loan of up to $97.5 million upon emergence from Chapter 11.
Additionally, iQor has filed a series of other First Day Motions that, subject to approval of the U.S. Bankruptcy Court, will allow the Company to continue to operate in the ordinary course of business while it works to reshape its capital structure. According to the First Day Motions, iQor has sought authority to allow it to continue to satisfy employee-related claims, obtain access to additional financing under the proposed post-petition financing agreement, pay vendors for all post-petition obligations in the ordinary course, and perform other critical functions and processes necessary for the Company to continue operations.
Further information about the Chapter 11 case can be found at:
iQor has also established a dedicated hotline for inquiries pertaining to this matter, which can be reached at (888) 626-8512.
iQor is advised in this process by FTI Consulting as financial advisor, Evercore as investment banking advisor, and Kirkland & Ellis LLP as legal advisor.
iQor is a managed services provider of customer engagement and technology-enabled BPO solutions. With 35,000 employees in 9 countries, we partner with many of the world's best-known brands to deliver aftermarket product and customer support solutions that span the consumer value chain, from customer care and receivables management to product diagnostics and repair services. Our award-winning technology, logistics, and analytics platforms enable us to measure, monitor, and analyze brand interactions, improve business processes, and find operational efficiencies that lead to superior outcomes for our partners across the customer and product life cycles. For more information, please visit us at www.iqor.com or follow us at www.twitter.com/iqor.
None of iQor, its advisors, or any of their directors, officers, affiliates, agents, or representatives makes any express or implied representation or warranty as to the accuracy or completeness of the information contained herein. This information represents the subjective views of iQor, and where applicable, iQor’s current estimates of future performance and outcomes based on various assumptions that may or may not prove to be correct. There can be no assurance that iQor’s views are accurate or will be realized. This press release includes forward-looking statements, which are inherently uncertain and based on assumptions that could change as a result of a number of factors, including, but not limited to, company operating performance, capital market risks, and general economic conditions. Past performance may not be indicative of future results. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend,” “forecast,” “foresee,” “likely,” “probably,” “possibly” or similar expressions. Actual results and developments may be materially different from those expressed or implied by such statements. Accordingly, there can be no assurance that such forward-looking statements will be realized. The actual results may vary from the anticipated results and such variations may be material.