Aspect Unveils Ch. 11 Plan To Rework $800M In Secured Debt
Call center technology firm Aspect Software Parent Inc. unveiled its Chapter 11 plan Thursday designed to rework its $800 million in secured debt with a standalone reorganization that hands control of the company to first-lien lenders, who can opt for an equity stake or participation in a new loan.
In papers before the Delaware bankruptcy court, Aspect said its plan aims to slash to company's debt load by more than $300 million, provides for a full recovery for unsecured creditors, and looks to have it exit Chapter 11 in up to 105 days.
Aspect had been exploring the possibility of a sale process as an alternative to a standalone reorganization, but attorneys for the company had previously said they believed they'd exhausted that avenue prepetition.
"The plan contemplates a significant reduction in long-term debt and annual cash and [payment-in-kind] interest payment obligations, and infuses new capital in the form of the new money investment and the new first lien revolving credit facility," Aspect said in its Chapter 11 plan disclosure statement. "Ultimately, the debtors believe consummation of the plan will result in a stronger, de-levered balance sheet for the debtors."
Under the plan, first-lien lenders can choose to take either a pro rate share of 100 percent equity in a reorganized Aspect or participate in a piece of a new senior term loan for $447.2 million due to mature in four years.
As for second-lien debt, Aspect intends to launch an at least $60 million rights offering in which second-lien noteholders can purchase payment-in-kind notes that will automatically convert into equity, according to the disclosure statement.
Allowed unsecured claims are deemed unimpaired, with holders thus deemed to accept the plan, and the two major voting constituencies are first- and second-lien lenders, according to court records.
Old equity in Aspect will be extinguished and equity in the reorganized company would not be publicly traded, the company has said.
Aspect, which provides call center services to sophisticated global companies such as major airlines and financial services firms has said that time is of the essence, and that the longer it stays in Chapter 11, the more likely it is to lose customers in its "hypercompetitive" industry, and is shooting to put its disclosure statement up for approval in April with a confirmation hearing in June.
Aspect lists Avaya, Genesys Laboratories, Cisco, Interactive Intelligence, Nice Systems, and Verint among its competitors.
The company filed for Chapter 11 protection March 9, contending that it needed to refigure its debt structure as it worked to update its technology to have a better chance against cloud-based competitors vying for market share in the same space.
Aspect traces its roots to 1981 and specializes in call-center or contact management technology and services, as well as customer self-service software and systems and technology-based customer outreach.
But a spate of industry mergers and consolidations have given rise to competition from companies able to operate over a broad area, and the sector is now routinely rocked by disruptive and updated technologies, standards and customer needs, CEO Stewart M. Bloom said in a first-day declaration.
Aspect is represented by Domenic E. Pacitti, Michael W. Yurkewicz and Morton Branzburg of Klehr Harrison Harvey Branzburg LLP and Joshua A. Sussberg, Aparna Yenamandra, James H.M. Sprayregen and William Guerrieri of Kirkland & Ellis LLP.
The case is In re Aspect Software Parent Inc., case number 1:16-bk-10597, in the U.S. Bankruptcy Court for the District of Delaware.
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