INAP (formerly known as Internap), a global provider of data center services including managed cloud hosting, bare metal, and colocation, has filed for bankruptcy with support from a new group of lenders. This bankruptcy includes all of INAP’s U.S. subsidiaries. INAP has entered into a Restructuring Support Agreement with an ad hoc lender group holding approximately 77% of its outstanding term loans.
INAP’s non-U.S. subsidiaries, including iWeb Technologies, Internap Network Services U.K. Limited, Internap Network Services B.V., SingleHop B.V. and INAP Japan, are not part of INAP’s Chapter 11 cases. INAP expects these non-U.S. subsidiaries to benefit from its intended improval of financial structure.
INAP operates more than 600,000 square feet of data center space in 21 metropolitan markets, primarily in North America, with 14 INAP Data Center Flagships connected by a low-latency, high-capacity fiber network.
In the bankruptcy filing on March 16, INAP reported assets of $724 million and debts of $785 million. With the news, INAP stock fell 58 percent. It is now just 11 cents a share.
Commitment to Growth
“INAP has been exploring strategic alternatives and financial initiatives to best position the company in an ever-evolving IT infrastructure landscape,” said Peter Aquino, Chairman and Chief Executive Officer (CEO) of INAP. “After a thoughtful evaluation of all available options, today, we are taking decisive action to strengthen our capital structure. We expect to emerge quickly, financially stronger and well positioned to deliver our comprehensive portfolio of premium data center infrastructure, best-in-class cloud solutions and high-performance network services well into the future.”
The ad hoc lender group has committed to providing INAP with debtor-in-possession (DIP) financing of $75 million. This financing, combined with INAP’s existing operating cash flows, would allow all of INAP’s businesses to continue operating as usual and position INAP to drive future growth. INAP’s ‘Plan of Reorganization’, which is under solicitation with its lenders, anticipates INAP will emerge from this process expeditiously as a private company with a significantly improved strategic and financial position.
“We appreciate the support we have received from our existing lender group, which underscores their belief in our business and commitment to its growth,” said Michael Sicoli, President and Chief Financial Officer (CFO) of INAP. “We look forward to working with them closely as we move ahead to invest in our business to meet the ever-growing demands of our customers and channel partners.”