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Delaware court approves WOM's agreement with bondholders and exit from Chapter 11 is getting closer
Friday, December 20, 2024 - 15:43
Foto WOM

The company said this is a “milestone” as it is one of the few Chapter 11 processes that have been approved in less than eight months.

An important milestone was reached today in the restructuring process of WOM. On Friday, the Delaware Bankruptcy Court (USA) approved the agreement reached between the company and the Ad Hoc group of bondholders.

With this, there are only a few steps left for the telecommunications firm to emerge from Chapter 11 of the United States Bankruptcy Law, which it entered in April of this year, amid a complex financial panorama.

A few days later, the then former CEO, Chris Bannister (Uncle WOM), alleged that WOM investors “failed to deliver on their commitment” to inject funding, which, along with various financial problems, led them to request voluntary reorganization.

US court approves WOM deal

The company said the approval from the Delaware court is a "milestone" as it is one of the few Chapter 11 processes that have been approved in less than eight months.

A hearing has now been set for January 23, and from then on, WOM would be preparing its exit from the US Bankruptcy Law, which would take place in February or March 2025.

The agreement between the company and the group of bondholders includes a “Sponsor Agreement” plan and a “Backstop Commitment Agreement”.

The agreed points include a capital injection of up to US$500 million, compensation in various forms for bondholders, a net debt reduction of approximately US$650 million, and the extinction of existing ordinary shares, among others.

In the same agreement, Wom is valued at around US$1.6 billion.

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