The company said that growing debt costs were starting to affect its operating budget at a time when inflation had already pushed labor and energy prices up.
According to QualTek’s court filings, the rate hike caused the company’s 2022 interest expense to rise by 33 percent to $59.3 million.
QualTek went public through a SPAC deal last year, just before the Federal Reserve started raising interest rates. The company raised less equity investment than it was expected, forcing it to take on additional interest-bearing debt.
The restructuring agreement that is supported by 80 percent of the company’s lenders would reduce QualTek’s overall debt by $307 million. It would also provide $40 million in new loans that will be used to fund the company’s post-bankruptcy operations.
“We are entering this process with the overwhelming support of our lenders and customers, which we expect will enable us to move through this process quickly and without disruption,” said QualTek CEO Scott Hisey.
Read more about QualTek in Reuters.
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