Data-center operator Cyxtera Technologies files for bankruptcy protection as debt woes mount
Data-center operator Cyxtera Technologies has filed for bankruptcy protection in New Jersey, citing financial difficulties and a significant funding shortage.
PremiumData-center operator Cyxtera Technologies Inc has filed for bankruptcy protection on Sunday in New Jersey, two years after the company went public. The company cited financial difficulties and a significant funding shortage.
The Miami, Florida-based company specializes in providing co-location services, enabling businesses to store their servers and networking equipment in third-party data centers like those operated by Cyxtera.
In March, Cyxtera entered into an agreement with its lenders to extend its revolving credit facility of $120.1 million, pushing back the maturity date to 2024.
However, the company's shares have plummeted over 90% since its initial public offering in 2021, trading at $0.16 at the most recent closing. Cyxtera had agreed to go public through a merger with a blank-check firm backed by shareholder activist Starboard Value LP, with the deal valuing the combined entity at $3.4 billion.
The data-center operator currently operates more than 60 data centers and has listed its assets and liabilities in the range of $1 billion to $10 billion. With over 5,000 creditors, Cyxtera initiated a business restructuring process earlier in May.
To sustain operations during the Chapter 11 process, the company received $50 million last month and announced an additional commitment of $200 million in debtor-in-possession financing from its lenders.
While Cyxtera intends to continue paying employee wages, salaries, and benefits without interruption, it clarified that its subsidiaries in Germany, Singapore, and the United Kingdom are not included in the court-supervised process. The company operates across 30 markets in total.
(With inputs from Reuters)
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