Seems those sketches of Spain were about right. US-based core network provider Casa Systems, prominent on the private networks scene, has filed for Chapter 11 bankruptcy proceedings in a court in Delaware, and agreed a deal at the same time to sell its 5G core and radio network (RAN) assets to Canadian telecoms and media software company Lumine Group for an undisclosed fee. At the same time (or a week prior, in fact), US private RAN supplier Airspan Networks has confirmed it will receive up to $95 million in new equity funding to eliminate debt.
The announcements explain some of the mood in the private-networks camp at MWC at the end of February. Casa Systems, which was selling its Axyom private-networks system via Verizon Business, among others, said it initiated voluntary bankruptcy proceedings to achieve “value-maximizing sales of its businesses”. It has asked that the deal with Lumine Group, which acquired Nokia’s device management and service management platform businesses for €185 million ( $203 million) at the end of 2023, is completed by the end of this month (April).
Meanwhile, it has also entered into a “stalking-horse asset purchase agreement” to sell its cable business to an affiliate of Canada-based broadband software and services firm Vecima Networks; the process is expected to establish an auction, invite additional bids, and close by mid-May. Casa Systems says it is seeking to meet obligations to staff, suppliers, and customers. Its NetComm business, which commenced voluntary administration proceedings in Australia on March 11 (2024), is not included in the US Chapter 11 process.
The company put it down to falling income, reduced funding, plus supply-chain issues and R&D costs. Michael Glickman, chief executive at the firm, said: “Casa has experienced a significant decline in revenue and profits due in large part to industry-wide downward capital investment and procurement trends in the cable and telco markets. We have also incurred significant investments to bring our 5G products to market. We believe the sales of our businesses through a Chapter 11 process will maximize value, preserve jobs and minimize disruption for our customers.”
Meanwhile, Airspan Networks has filed “voluntary prepackaged” Chapter 11 proceedings in the same bankruptcy court in Delaware, together with its US subsidiaries. This “prepackaged” get-out-of-jail funding deal will enable it to enter into a ‘restructuring support agreement’ with Fortress Investment Group, plus “other key financial stakeholders”, to the tune of $53 million in debtor-in-possession (DIP) financing, rising potential to $95 million. This will be sufficient to wipe the slate clean of “all existing funded debt”, it said, and start again in “30-45 days” as a private company majority-owned by Fortress Investment Group, plus affiliates.
The agreement with Fortress Investment Group has received support from 97.4 percent of the company’s funded debt creditors, it said. The DIP funding plan is subject to court approval, plus regulatory consents. Airspan said it expects to complete the process on a highly expedited basis. The DIP funds would support its operations during the restructuring process, it said, and “safeguard its commitment to employees, customers, and suppliers”. Airspan shareholders will be offered a pro rata share of $450,000 for their shares.
Glenn Laxdal, president and chief executive at Airspan, said: “This support agreement is the culmination of a strategic review process, and we believe it is the best path forward for Airspan… By strengthening the company financially with new capital and a debt-free balance sheet, we will be better positioned to execute our plan to capitalize on the significant growth opportunities across our public and private network markets. We appreciate the support and engagement of all of our stakeholders as we build Airspan for the future.”
