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Enters Chapter 11 process with $6 million of committed DIP financing
NEW YORK, May 15, 2022 /PRNewswire/ — Pareteum Corporation (OTC:TEUM) and certain affiliates (collectively, “Pareteum” or the “Company”), a global cloud Communications-Platform-as-a-Service (CPaaS) company, today announced that the Company filed for voluntary protection under Chapter 11 of the US Bankruptcy Code (“Chapter 11”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Company intends to execute a strategic asset sale under section 363 of the Bankruptcy Code while addressing legacy issues to best position the business for future success.
Prior to the filing of the Company’s Chapter 11 cases, the Company’s Board of Directors and management evaluated a wide range of strategic alternatives and implemented a strategic asset sale strategy. After a thorough marketing process to obtain a “stalking horse bidder” for a court- supervised sale process and as a result of arm’s length negotiations, Circles MVNE Pte. Ltd. (“Circles”) has combined with Channel Ventures Group, LLC (“CVG”) to execute a stalking horse asset purchase agreement for substantially all of the assets of the Company. Circles has agreed to acquire the Company’s Mobile Virtual Network Enabler (MVNE) business and associated contracts, and CVG has agreed to acquire the Company’s Mobile Virtual Network Operator (MVNO), IDM, iPass, and Small and Medium Business Enterprise ( SMB) businesses and associated contracts. These agreements are subject to higher and better offers, among other conditions, as well as approval from the Bankruptcy Court.
The Company expects to continue operations as usual during the Chapter 11 process and complete the process in a swift manner. To help fund and protect its operations, Pareteum has received a commitment from Circles for up to $6 million in debtor-in-possession (“DIP”) financing. Upon approval from the Bankruptcy Court, the DIP financing, along with normal operating cash flows and the consensual use of cash collateral, will fund post-petition operations and costs under normal terms.
“Pareteum has faced numerous challenges in …
Full story available on Benzinga.com
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