Colocation company Internap Corporation (INAP) has filed for bankruptcy along with all its US subsidiaries.

INAP said it would continue to function and has joined up with a group of lenders that hold 77 percent of the company's outstanding term loans. INAP said in a statement that with support of the lenders it will be able to use bankruptcy as a means to reduce its debt. The firm also said that its lenders will provide the company with debt financing of around $75m.

Michael Sicoli, president and CFO, said: “We appreciate the support we have received from our existing lender group, which underscores their belief in our business and commitment to its growth. We look forward to working with them closely as we move ahead to invest in our business to meet the ever-growing demands of our customers and channel partners.”

The Chapter 11 filings were made in the US Bankruptcy Court for the Southern District of New York. The company operates more than 600,000 square feet of data center white space.

Update: The company is now out of bankruptcy. We talked to the company's new CEO about what it plans to do next.

Stocks plummet

It was revealed that in the filing on March 16, INAP reported assets of $724m and debts of $785m. With the news, INAP stock fell 58 percent, it is now just 11 cents a share.

Peter Aquino, chairman and CEO, said: “After a thoughtful evaluation of all available options, today, we are taking decisive action to strengthen our capital structure.

“We expect to emerge quickly, financially stronger and well-positioned to deliver our comprehensive portfolio of premium data center infrastructure, best-in-class cloud solutions, and high-performance network services well into the future.”

INAP’s non-US subsidiaries, including iWeb Technologies, Internap Network Services UK Limited, Internap Network Services BV, SingleHop BV, and INAP Japan, are not part of the company’s Chapter 11 cases, but are “expected to benefit from the company’s improved financial structure,” the company claimed.

In its Chapter 11 petition, Internap Inc. listed its largest debtor as construction firm Burr Computer Environments, which is owed $3.1m. Other debtors include Zayo Group ($849,546), Equinix ($769,572) and Akamai Technologies ($428,514).