In-flight Wi-Fi provider Global Eagle files for bankruptcy

Global Eagle Entertainment, the provider of in-flight WiFi and related services, filed for bankruptcy with plans to sell itself to its lenders including Apollo Global Management. The Chapter 11 filing in Delaware allows Los Angeles-based Global Eagle to continue operating while it seeks court approval for a plan to repay creditors. This includes selling itself to an investor group with Apollo, Eaton Vance Management and certain funds and accounts managed by BlackRock Financial Management, according to a company statement. The deal is worth $675m, Global Eagle said, and will cut its total debt by about $475m. The company listed assets of $630.5m and liabilities of $1.09b in its petition, including $855.6m in funded debt. It employs about 1,100 workers. The company sells internet, media content and data analytics to airlines and cruise lines, among others, which have been devastated by Covid-19. Aviation, one of Global Eagle’s largest customer segments, isn’t expected to see a substantial recovery in passenger traffic until 2023, according to S&P Global Ratings, while major cruise lines have suspended operations through mid-September. “The recent decline in demand for its customers’ services as a result of Covid-19, and the uncertainty regarding a potential resurgence of the pandemic, has had a swift and negative impact on the company’s operations and cash flow,” according to court papers. The pandemic compounded existing pressure from the heavy debt load at Global Eagle, which lost about $153m in 2019 and posted negative cash flow for the past two years, the company said.<br/>