Global Eagle Entertainment Inc. filed for bankruptcy in Delaware on Wednesday, July 22, 2020, becoming the latest travel-related bankruptcy during the pandemic. Global Eagle provides Wi-Fi services to airlines and ships, and plans to turn ownership over to Apollo Global Management Inc. and other lenders.
The debtors receive approximately a fifth of their revenue from Southwest Airlines Co. Global Eagle said it will continue serving customers throughout the bankruptcy proceeding, and plans to emerge from bankruptcy by the end of the year with $475 million less debt.
According to its petition, Global Eagle had approximately $630.5 million in assets and 1,115 employees at the time of the bankruptcy filing. According to the company, its future owners intend to provide a $125 million credit facility as exit financing upon completion of its restructuring.
CFO Christian Mezger stated that the company “had been adversely impacted by the COVID-19 pandemic” as its airline and cruise line partners had ceased or severely reduced their operations. The bankruptcy filing added that demand for Golden Eagle services had “drastically” shrunk, impacting the company’s operations and cash flows.
Global Eagle plans to obtain $80 million in debtor-in-possession financing and expects the financing to provide liquidity to support its operations during the sale process.