Cyxtera files plan of reorganization with bankruptcy court

Cyxtera has submitted a reorganization plan to the US Bankruptcy Court for the District of New Jersey. Lenders with over two-thirds of the company's outstanding first-lien debt support the proposal.

The proposal would get rid of more than $950 million in pre-filing debt for Cyxtera. In either a recapitalization or sale scenario, the company stated that it remains on track to come out from the court-supervised process by the autumn of this year. Cyxtera has set a deadline of August 18 for final bids. In June, the company stated that six parties were genuinely interested in acquiring its assets.

Cyxtera filed for Chapter 11 protection at the beginning of June as it struggled with more than a billion dollars in debts, the majority of which were long-term debts maturing within the following year. Some lenders provided $200 million in debtor-in-possession financing to keep the company afloat during the process.

The colo company operated more than 60 facilities with a combined capacity of more than 245MW across 29 markets prior to the filing, with a significant portion of its portfolio being leased. Since the filing, however, it has rejected leases at two data centers owned by Prime in Silicon Valley, one owned by Stack in Elk Grove, Illinois, and additional facilities in Washington and Amsterdam. Digital Realty disclosed in its quarterly earnings report that it had written off $25 million of non-cash straight-line rent and $6 million in bad debt reserves linked to a tenant suspected to be Cyxtera.