Dive Brief:
- Managed service provider TPx canceled its sale auction after failing to find a qualified bidder, the company told the U.S. Bankruptcy Court for the Southern District of Texas on Monday. The auction would have taken place Aug. 12 as part of a court-approved Chapter 11 bankruptcy plan.
- TPx will work with its creditors through the amended restructuring support agreement established June 28. The company continues to trim a $1.1 billion debt load, having already touted $73.6 million in debtor in possession financing.
- “We are officially moving forward with a lender-led recapitalization, as the bid deadline has passed and the auction has been cancelled,” a TPx spokesperson told Channel Dive in an email. “The path forward reflects the confidence TPx's lenders have in the strength of the business, provides continuity for customers, partners and employees, and gives TPx the flexibility to accelerate its strategy and increase investments across the business.”
Dive Insight:
TPx dismissed nine bidders after an exploratory process with an investment bank last year. The possibility of an acquisition once again fell through Monday when the company said it did not receive any qualified bids by an Aug. 7 deadline.
The proposed auction would have allowed bidders to buy all or parts of TPx, leaving open the possibility that the MSP would be stripped for parts. Barring a sale, TPx remains fully intact going forward.
The company formerly known as TelePacific Communications is left to continue ironing out obligations with lenders, many of which are technology vendors and channel partners.
Comcast-owned Nitel told the court that TPx owes it a cure amount of $121,498 rather than a previously disclosed $49,438 related to various joint customer accounts. Creditors have until Aug. 26 to file objections to the restructuring support plan, which will be confirmed Sept. 2, according to the auction cancellation notice.
TPx’s downstream sale agents are not experiencing financial impact.
“We are grateful to our partners and partnerships will continue as normal,” TPx told Channel Dive. “TPx is committed to supporting our channel partners, including continuing to pay commissions and working with them in the ordinary course of business.”
