Confronted by sinking stock prices and an ever-hostile market, the company embarked on a restructuring quest early this year. Lenders, seeing the potential in the company, threw them a lifeline with a $3 million bridge loan. Now, they’re moving to swap their outstanding debt for a stake in Capstone’s equity.
California Gas Turbine Maker : Silver Lining for Creditors and Shareholders
Lenders have come to the rescue, not just with words but with a hefty $20 million in debtor-in-possession financing. This includes a mix of new funds and rolling up previous debts.
The proposed plan indicates a beacon of hope for unsecured claims as they remain unimpaired. Plus, the lenders are set to offer equity shares in the renewed company to the current shareholders.
Juric elaborated, “Without this consensual strategy, our only remaining option would’ve been the foreclosure of the company assets. This would’ve been a nightmare scenario with almost nil recovery chances for both unsecured creditors and equity.”
California Gas Turbine Maker : The Road Ahead
The horizon seems promising as Capstone gears up for a plan confirmation hearing on Nov. 7. Their primary objective? To emerge from bankruptcy, trim down costs, and ensure seamless business operations.
