Casa Systems (NASDAQ: CASA) stock nosedived 80% in intraday trading Wednesday as the company began a court-supervised Chapter 11 sale process to optimize its business asset value.
Casa Systems (CASA) has taken a significant step toward restructuring its operations. The company recently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
Casa Systems Seeks Bankruptcy Relief
In a bid to navigate through this restructuring process, Casa Systems has initiated asset sale agreements. The company has agreed to sell its 5G Mobile Core and RAN (Radio Access Network) businesses, which include the Axyom Cloud Native 5G Core Software & RAN Assets, to Lumine Group. Casa Systems is seeking approval from the Bankruptcy Court to finalize this transaction by the end of April.
In addition, Casa Systems has forged ahead with plans to divest its Cable business, entering into a stalking-horse asset purchase agreement with an affiliate of Vecima Networks. The company is seeking approval from the Bankruptcy Court to proceed with soliciting additional bids and setting an auction for mid-May.
Moreover, to facilitate the sale process and navigate through Chapter 11 proceedings, Casa Systems has secured a Restructuring Support Agreement (RSA) with over 98% of its senior secured lenders. This agreement enables Casa to utilize its available cash and the anticipated proceeds from the Cloud/RAN Sale to sustain its operations and Chapter 11 process.
Commenting on the situation, Michael Glickman, Chief Executive Officer of Casa Systems, acknowledged the challenges faced by the company amidst a decline in revenue and profits. He attributed these challenges to broader industry trends impacting capital investment and procurement in the cable and telco markets.
He further added,
“We also have incurred significant investments to bring our 5G Mobile Core and RAN products to market. We believe the sales of our businesses through a Chapter 11 process will maximize value, preserve jobs, and minimize disruption for our customers.”
Casa Systems (NASDAQ: CASA) Stock Movement
CASA stock plummeted 78.64% to close at $0.05 on Wednesday. The traders had exchanged hands with 65,404,428 (65.40 million) shares compared to the average daily trading volume of 1.34 million.
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