US-based network vendor Casa Systems entered into a court-supervised bankruptcy process in an attempt to shore up its bottom line, which included an agreement to sell-off its 5G core and RAN business to Lumine Group.
The company asked a bankruptcy court to approve the transaction by the end of April. Financial terms of the deal weren’t disclosed.
In addition, Casa Systems entered into a “stalking horse” agreement with fixed access network technology specialist Vecima Networks to sell its cable network technology business for $20 million.
Dell’Oro Group VP and analyst Jeff Heynen explained in a blog post the stalking horse bid “sets the low end so that any additional bidders can’t underbid the purchase price”.
The vendor requested the bankruptcy court approve procedures for soliciting additional bids and to set an auction for mid-May.
Casa Systems CEO Michael Glickman chalked up the Chapter 11 bankruptcy proceeding to “a significant decline in revenue and profits due in large part to industry-wide downward capital investment and procurement trends in the cable and telco markets”.
While the company initially made its mark selling broadband equipment to cable operators, Glickman noted it incurred significant investments to bring its 5G mobile core and RAN products to market.
In 2022, US operator Verizon made a $40 million investment in Casa that resulted in a 9.9 per cent ownership stake.
In connection with the sales process, Casa has entered a restructuring support agreement with more than 98 per cent of its senior secured lenders that will enable it to use cash on hand and the proceeds of its proposed cloud/RAN sale to fund its operations and the Chapter 11 process.
While it winds its way through bankruptcy, Casa Systems stated it will continue to support its customers and partners throughout the process.
The post Casa Systems sails into bankruptcy proceeding appeared first on Mobile World Live.
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