SAN DIEGO-Leap Wireless International Inc.’s amended joint plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the Southern District of California.
The plan, still subject to regulatory approval from the Federal Communications Commission, is expected to reduce the company’s current long-term debt from more than $2.4 billion to approximately $426 million. Once the plan goes into effect, Leap’s stock will be cancelled, and existing stockholders will receive nothing.
“Confirmation of the plan in just over six months sets a very rapid pace for a case of this size and complexity, and we are emerging from the bankruptcy process with the wind at our backs,” said Harvey White, Leap’s chairman and chief executive officer. “Upon emergence, we will reinforce our leadership position with a vastly de-leveraged balance sheet, more than $100 million in cash to support our ongoing operations and a strong business that is generating cash each month.”
Shares of Leap were down nearly 50 percent to trade at 1 cent following the news.
