Struggling broadband provider Starry Internet has filed for bankruptcy.
The company confirmed the decision yesterday (February 21), as the Boston-based firm entered a Restructuring Support Agreement (RSA), with lenders holding the company’s debt.
Starry filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the court).
It comes just over a year after Starry completed its Special Purpose Acquisition Company (SPAC) merger with FirstMark Horizon Acquisition Corp, a SPAC sponsored by an affiliate of New York venture capital firm FirstMark Capital.
The deal valued Starry at 1.6 billion at the time and gave Starry $452 million in cash.
But since then, Starry has seen its share price go from $11 per share down to pennies with TechCrunch noting that six million shares changed hands as the announcement was made yesterday.
In a statement, the company said that the RSA will significantly reduce Starry's debt while optimizing its capital structure and liquidity.
Starry has said that its customer and networking operations will operate as normal across its five core operating markets: Boston, Massachusetts; New York City, New York; Los Angeles, California; Denver, Colorado and Washington, DC.
“Over the last several months, we’ve taken steps to conserve capital and reduce costs in order to put Starry in the best position to explore various financing paths for the company,” said Chet Kanojia, Starry’s chief executive officer. “Our next step in this journey is to continue to strengthen our balance sheet through a Chapter 11 restructuring process.
“With the support of our lenders, we feel confident in our ability to successfully exit this process as a stronger company well-positioned to continue delivering an affordable, high-quality broadband experience to our customers. The Restructuring Support Agreement provides us with the funding needed to continue operating as normal, through this restructuring process and as we guide the company to profitability."
In November of last year, Starry was said to be considering either a full or partial sale as cash dried up during the quarter to $29.4 million, down from $99.7m at the end of the previous quarter.
This came fresh off the back of a decision to cut 500 jobs, which was around half the entire workforce. The company cited 'cost-saving measures' for the decision before the firm slashed another 100 jobs last month.
According to the company, the latest job cuts last month will enable Starry to save around $12 million from its operating expenses in relation to employee salaries and benefits over the next year.
Founded in 2014, Starry provides fixed wireless broadband to residential and small to medium-sized businesses from towers and rooftops.