Constellis, owner of Energy Department contractor Centerra Group, said Monday its lenders have approved an overhaul of the company’s debt package that should strengthen its balance sheet.
The debt for equity exchanges received consent from 100% of term loan and revolving lenders, according to a Constellis press release.
As a result, Constellis is cutting its debt by about $1.1 billion and annual cash interest payments to lenders by as much as $90 million, while adding up to $50 million in new capital to support operations.
“This transaction is a significant milestone in our transformation of Constellis, strengthening our company financially and positioning the business for the long term,” Constellis CEO Tim Reardon said in the release. “Our lenders were very supportive throughout this process and we look forward to continuing to work with them as the new owners of Constellis,” the CEO added.
The credit reorganization, achieved without going through any bankruptcy court, cuts Constellis debt from $1.4 billion to $310 million.
The move comes more than two months after Constellis reached a “forbearance” agreement with creditors, in which its lenders agreed to hold off on any legal action while the company stabilized its balance sheet. Prior to that, Constellis’ credit ratings had been downgraded by the Moody’s and Standard and Poor’s ratings agencies, prompting speculation the company could slip into bankruptcy.
An international provider of risk management, site security, and support services to government and private installations worldwide, Constellis has about 22,000 employees.
Florida-based Centerra holds the security contract for DOE’s Savannah River Site in South Carolina. It is also the minority partner in Leidos-led Mission Support Alliance, the provider of site support services at the Hanford Site in Washington state.
