Fusion Connect, which said chapter 11 bankruptcy could be a possibility, has secured $15 million in bridge financing from first-lien lenders as it continues to review options to enhance its capital structure.
The bridge financing is a short-term form of financing that is used to meet current obligations before securing permanent financing. The cloud communications provider sells through partners.
The new capital will allow Fusion and its key stakeholders to continue to evaluate and pursue a strategic path that will “best position the company for the future,” Fusion said. In addition, the company can request up to an additional $5 million under the bridge-financing facility.
Fusion is engaged in discussions with its first and second lien lenders, and other stakeholders regarding strategic alternatives.
“This new agreement is a step forward for our business as it provides additional funding in the short term to ensure that we can reach the best long-term solution for our business while enabling us to meet our commitments to our employees, customers, partners and suppliers,” said Matthew Rosen, Fusion‘s chairman and CEO. “All options currently being considered will allow us to maintain our business operations without interruption while we work to achieve our financial goals. I am confident the steps we are taking now will position us well for years to come.”
In an email to partners in April, Fusion wrote: “Be assured that we are committed to paying all commissions in full and on time. As a matter of fact, as we strengthen our financial position, we fully expect to find even more ways for us to sell, compete and succeed together.”
Last month, Fusion saw its stock price plummet after it revealed it had failed to make $7 million in loan payments and had not filed its annual report on time. Its stock then was delisted from the Nasdaq.
Fusion said nonpayment of the installments constituted an “immediate event of default” under its credit agreement. It also said it had been informed by some lenders that they intended to declare all amounts borrowed to be immediately due and payable.