Cable-box repair company Contec Holdings Ltd, a business owned by private equity firm Bain Capital, is preparing to file for bankruptcy this week, the Wall Street Journal reported, citing people familiar with the matter.
Contec is expected to file a prepackaged bankruptcy, in which creditors agree to a restructuring plan that would speed up the legal process, the WSJ reported, adding that Contec would eliminate more than $300 million of debt under the plan.
Bain bought Contec in 2008 and the restructuring agreement will wipe out its investment in the company, the paper said. (r.reuters.com/cuk32t)
Bain has already written down its investment in Contec to zero and will hand over Contec to lenders, it said.
"While the market leader in its industry, Contec's financial performance was impacted significantly by a dramatic slowdown in cable subscribers due to the recession, technology shifts, and increased competition," Bain told the WSJ in a statement.
"We have supported the company through the restructuring process, which we believe will help Contec emerge in an even stronger position to grow its business."
Contec could not be reached for immediate comment outside of U.S. office hours.
(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Rodney Joyce)