Clover Technologies Lenders Hire Lawyers After Loss of AT&T Business --Update

Date : 07/15/2019 @ 9:32PM
Source : Dow Jones News
Stock : AT&T (T)
Quote : 35.1713  0.0113 (0.03%) @ 3:37PM

Clover Technologies Lenders Hire Lawyers After Loss of AT&T Business --Update

AT&T (NYSE:T)
Historical Stock Chart

2 Months : From Jun 2019 to Aug 2019

Click Here for more AT&T Charts.
By Alexander Gladstone 

Clover Technologies Group lenders have hired law firm Jones Day after one of the mobile phone refurbisher's biggest customers said it was taking the bulk of its business elsewhere, according to people familiar with the matter.

Jones Day, which often represents creditors of struggling companies, will advise the group on pending discussions regarding restructuring some $650 million of the company's debt, the people said.

Clover Technologies refurbishes and recycles electronic equipment. Last week, its parent, 4L Holdings Corp., disclosed to investors that one of the largest customers of its wireless division has "decided to fulfill requirements for refurbished older units by purchasing them directly from the OEM [original equipment manufacturer] rather than having them refurbished by Wireless and other vendors."

Clover, which is based in Illinois and is owned by private-equity firm Golden Gate Capital, didn't name the customer in the disclosure. However, two of the people said it was AT&T.

In addition to the loss of business from AT&T, Clover said it expected a loss of business from a customer of its imaging business.

The company has hired law firm Kirkland & Ellis and investment bank Jefferies to evaluate balance-sheet alternatives and strategic options.

In preparation for the negotiations, the lenders hired Jones Day on Friday, the people familiar with the matter said. This week, the group also plans to hear pitches from prospective financial advisers. Evercore and Houlihan Lokey have both been invited to pitch, two of the people said.

In a downgrade of the company's debt last week, Moody's Investors Service cited Clover's loss of customers and looming debt maturities as key factors in it financial struggles. The ratings firm also said Clover's imaging segment is likely to see revenue erosion because of the "steady reduction in print volumes."

Earlier this year, Clover launched an effort to refinance its term loan, which had about $700 million outstanding at the time. However, the effort languished over pricing differences with buy-side accounts, the people said.

The company also has been working to line up potential buyers of some of its business units, people said.

As of the end of June, the company had $136 million of cash outstanding on its balance sheet, according to its disclosure.

Clover declined to comment. AT&T and Jones Day didn't respond to requests for comment.

Write to Alexander Gladstone at alexander.gladstone@wsj.com

 

(END) Dow Jones Newswires

July 15, 2019 16:17 ET (20:17 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

Latest T Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.