Commences Voluntary Chapter 11 Process in the U.S. and Files for Protection Under the Companies’ Creditors Arrangement Act (CCAA) in Canada
Operations to continue in normal course with no expected disruptions to customers, vendors or employees
Wayne, PA – April 11, 2022 – Sungard Availability Services (Sungard AS) today announced that, after evaluating several strategic alternatives, it has filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court in Houston, Texas and commenced proceedings in respect of its Canadian subsidiary under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice in Toronto, Canada. A Sungard AS subsidiary initiated an administration proceeding for its business in the United Kingdom on March 25, 2022, to preserve value while working toward a longer-term solution. Sungard AS firmly believes these actions together provide the best path forward to protect its operations and customers, and to address its financial challenges in a manner that maximizes value and best positions the business for long-term success.
“Like many companies, our business has been affected by challenges in our capital structure, driven by the global COVID-19 pandemic and other macroeconomic trends including delayed customer spending decisions, insourcing and reductions in IT spending, energy inflation, and reduction in demand for certain services,” said Michael K. Robinson, Chief Executive Officer and President, Sungard Availability Services. “Over the past three years, we’ve made significant network, product and infrastructure investments which are being well-received by customers and gaining significant traction. We believe the chapter 11 process is a right and critical step forward for the future of our business and our stakeholders.”
Sungard AS previously completed a “pre-packaged” chapter 11 filing in May of 2019. The 2019 process addressed Sungard AS’s long-term debt issues by eliminating more than $800 million in debt and infused $100 million of new liquidity by the Company’s creditors. While it was successful in reducing the Company’s long-term debt, the process did not solve for challenges inherent to the Company’s operating structure, mainly uneconomical leases and underutilized space. The business has been working to address these cost challenges over the last three years. Recent factors have resulted in the Company’s decision to accelerate addressing the Company’s cost structure in the U.S. for the overall financial stability of Sungard AS’s global operations.
To support its ordinary course operations during the process, the Company secured access to $7 million of bridge financing in advance of the chapter 11 cases. In addition, the Company has received a commitment for up to approximately $95.3 million in new money debtor in possession (DIP) financing from certain of its secured lenders. The Company expects to complete the process by mid to late summer, 2022.
Based on the additional financing received, Sungard AS intends to meet its financial obligations, including paying suppliers in the normal course of business for goods and services delivered from today forward. The Company also has filed the customary motions to honor its ongoing commitments to employees and customers. As such, Sungard AS will continue to operate in the normal course of business, including delivering the high levels of service its customers expect.
Sungard AS’s operations in Ireland, France, India, Belgium, Luxembourg, and Poland are not impacted by the proceedings in the U.S., Canada, or the U.K.
Additional information about Sungard AS’s chapter 11 filing can be found at: https://cases.ra.kroll.com/SungardAS.
Information about the Canadian proceedings can be found at: http://www.alvarezandmarsal.com/SungardASCanada.
Sungard AS is advised in this matter by Akin Gump Strauss Hauer & Feld LLP, Jackson Walker LLP, Cassels Brock & Blackwell LLP, FTI Consulting, Inc., DH Capital, LLC and Houlihan Lokey Capital, Inc.
About Sungard Availability Services
Sungard Availability Services (Sungard AS) is a leading provider of cloud connected infrastructure solutions serving enterprise customers from 75 hardened data centers and workplace recovery facilities in nine countries. Sungard AS has a 40-year track record of delivering resilient and highly available hybrid IT solutions. Backed by high-performance networks, Sungard AS modernizes customers’ end-to-end IT across connected infrastructure, cloud, recovery and workplace solutions. Working with customers to understand their business objectives, Sungard AS identifies gaps in customers’ current environments and tailors a solution to achieve their desired business outcomes. Visit Sungard AS at www.sungardas.com or call +1 888 537-6519 in the U.S. or +44 808 238-8080 in the U.K. Connect with us on our blog, LinkedIn, Twitter, Facebook and YouTube.
Sungard Availability Services is a trademark or registered trademark of SunGard Data Systems or its affiliate, used under license. The Sungard Availability Services logo by itself is a trademark or registered trademark of Sungard Availability Services Capital, Inc. or its affiliate. All other trade names are trademarks or registered trademarks of their respective holders.
The abbreviation for Sungard Availability Services is ‘Sungard AS’ as cited above. Please use ‘Sungard AS’ when abbreviating the name rather than ‘Sungard’ or ‘SunGard,’ which may confuse the reader with another separate company with a similar name.
Cautionary Note Regarding Forward-Looking Statements
Any statements contained in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words "anticipates," "believes," "expects," "intends," "plans," "estimates," "targets," "projects," "should," "may," "will," statements regarding future timing of a chapter 11 proceeding and similar words and expressions are intended to identify forward-looking statements, as defined within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Such forward-looking statements include, among others, those concerning the completion, outcome and effects of the chapter 11 cases, the ability of Sungard AS to obtain bankruptcy court approval of the matters described in this press releases, including with respect to any debtor-in-possession financing, the ultimate outcome of the chapter 11 cases and any restructuring of Sungard AS effectuated thereby and Sungard AS’s ability to reduce its debt or strengthen its financial position. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.