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Inflight TV provider Global Eagle Entertainment has filed for bankruptcy protection as airline and cruise line travel collapses amid the coronavirus pandemic.
The Chapter 11 filing by Golden Eagle — which has assets worth around $630.5 million and carries $1.08 billion in debt across first-lien and second-lien creditors — was made in a U.S. bankruptcy court in Delaware. The application includes a “stalking horse” purchase agreement with secured lenders to kick-start a bidding process for company assets with an eye to Golden Eagle eventually emerging from bankruptcy protection.
Golden Eagle acquires nontheatrical releases and music from Hollywood and indie content producers internationally, while also providing satellite-based WiFi Internet to travelers. The company’s unsecured creditors include Lionsgate Entertainment, Paramount Pictures, Sony, Warner Music Group, Fox International Channels and CBS.
In the July 22 filing, CFO Christian Mezger said the company “had been adversely impacted by the COVID-19 pandemic” as its airline and cruise line partners had ceased or severely reduced their operations. The Chapter 11 filing added that demand for Golden Eagle services had “drastically” shrunk, impacting the company’s operations and cash flows.
The court-directed bankruptcy filing follows the company cutting costs and drawing down its revolving credit line to stay afloat. Golden Eagle said debt restructuring talks with its bondholders culminated in a July 22 agreement that includes a formal auction of company assets.
Its main lenders include private equity firms Searchlight Capital Partners, Nantahala Capital Management, ABRY Partners and Frontier Capital Management. Consenting first-lien creditors have agreed to inject new financing, including a $80 million term loan, to ensure Golden Eagle can be “preserved as a going concern” and eventually emerge from bankruptcy protection.