Securus Technologies disclosed last week that its majority owners committed $60 million of additional capital to support the business and that it is seeking a refinancing of its near-term debt maturities, according to sources.
The Dallas-based provider of telecom services to incarcerated people told investors that it expects to refinance its outstanding debt this year, the sources said. Securus has an RCF due August 2024, a first lien term loan due November 2024 and a second lien term loan due 2025.
Securus also said it expected to continue as a going concern, or meet obligations as they come due, in the 12 months following the earnings disclosure last week, the sources said.
The company in November 2022 received $75 million in additional borrowing capacity through an incremental revolver, Reorg earlier reported
. The Platinum Equity-backed company had
$3.3 million in cash as of Sept. 30.
Inflation and falling discretionary income have curbed spending on phone calls and other services in correctional facilities, adding to headwinds Securus faces from competitors such as Global Tel Link and the regulation of the prison industry.
An ad hoc group of lenders to Securus represented by Gibson Dunn as counsel and Evercore as financial advisor has been working toward a cooperation agreement, Reorg reported
in March. A separate lender group was organized with Paul Weiss as legal advisor and Ducera Partners as financial advisor.
The company’s first lien term loan was quoted today at close to 72, according to Solve Advisors, while its second lien term loan was quoted near 55.
Securus parent company Aventiv Technologies and sponsor Platinum did not immediately respond to requests for comment.
--Alex Wittenberg, Harvard Zhang