Wilmington, Delaware; New York; Hong Kong:
Global A&T Electronics, a Singapore-based chip assembler that took on hefty debt a decade ago through a buyout by TPG Capital and Affinity Equity Partners, filed for bankruptcy as a 2013 debt exchange came back to haunt it.
The chip-assembler listed debt of more than $1 billion (Dh3.67 billion) and assets of over $500 million in Chapter 11 papers filed Sunday in US Bankruptcy Court in New York.
Pursued by bondholders since 2014, when a GSO Capital Partners fund and others cried foul over the debt exchange, Global A&T finally seemed to put the problem behind it when it announced a settlement in mid-September. At the same time, other bondholders had come forward to say they weren’t giving up their own lawsuit over the debt exchange, brought in 2017.
Such disputes — which also plagued a fellow distressed company owned by TPG, preppy retailer J. Crew Group Inc. — arise when creditors try to leapfrog each other in the priority scheme to be repaid. They seem to be increasing in frequency due to low interest rates in recent years that allowed companies to refinance and take on multiple layers of debt.
Global A&T, also known as GATE, had said in a filing in November that it expected to commence the Chapter 11 case no later than Dec. 17, upon receiving sufficient acceptances to confirm its restructuring plan. As of Dec. 13, 100 per cent of the holders of claims entitled to vote, have voted to accept the plan, according to a filing.
As part of the restructuring, the company planned to issue $665 million in 8.5 per cent new secured notes due 2022, according to a filing in November.
TPG and Affinity Equity Partners took the company, previously known as United Test & Assembly Center Ltd., private in a $1.77 billion leveraged buyout in 2007. The company employs about 10,000 engineers, technicians, and corporate, legal and sales professionals in China, Singapore, Thailand and the US.
—Bloomberg
