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IT Infrastructure Provider INAP Exits Chapter 11 Bankruptcy

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IT infrastructure provider Internap (INAP) and its U.S. subsidiaries have emerged from chapter 11 bankruptcy protection. And its partners will notice improvements in the months ahead.

That’s according to Michael Sicoli, INAP’s new CEO. INAP emerged from chapter 11 in less than two months and cut its debt by more than $160 million. The IT infrastructure provider offers colocation, managed cloud and network services.

The U.S. Bankruptcy Court for the Southern District of New York confirmed INAP’s reorganization plan earlier this month.

Other companies in the channel that have filed chapter 11 in the last two year include Windstream, Fusion Connect, Sungard AS and Frontier Communications.

Partners ‘Not Impacted’

The bankruptcy only impacted creditors who held the debt, Sicoli said.

INAP's Michael Sicoli

INAP’s Michael Sicoli

“I’m aware of other bankruptcy situations where contracts were modified or canceled, or payments were lost,” he said. “None of that happened here. So for us, the conversations with channel partners during the bankruptcy were more educating them on how ours is different than some of the others they may have seen, and that they didn’t need to worry that there was going to be any disruption. We didn’t cancel any contracts. We didn’t change any of the payment structures.”

Keep up with what’s been a busy year-plus of bankruptcy news in the channel.

Sicoli said the restructuring directly benefits INAP’s partners. Master agents, agents and VARs are among them.

“It means we are a much stronger partner for them going forward because we have a much stronger financial foundation,” he said. “We have significantly less debt and the maturities on the debt we have are five years out in the future. We have positive cash flow and we are now backed by a marquee group of investors who are really interested in getting this business back to growth.”

Going private is a definite plus for the IT infrastructure provider’s partners, Sicoli said.

“It’s hard to be a public company, right now for sure, and really at any time,” he said. “The smaller you are, the harder it is to be a public company. There’s a lot more volatility in your stock price, and there’s just a lot more noise associated with smaller public companies. And many of the peers that we compete with are very large public companies or private. So we were kind of in a tough spot as being the only sort of small public company.”

Improvements Coming

In general, there are improvements INAP can make across the company, Sicoli said.

“Specifically with respect to partners, we know we can provide better tools,” he said. “We know we can increase the speed and the agility, and the competitiveness with which we move, which should benefit both our direct sales teams as well as our channel partners. We’ve gotten a little bit away from that over the years. One of my key areas of focus now as we go forward is, we need to be fast and we need to get an aggressive, competitive answer in the hands of our partners as quickly as possible.”

INAP sees a big opportunity to increase its exposure in the channel, Sicoli said.

“There’s a huge pie of opportunity out there, and we’re only addressing a small slice of it with our own direct team and we really need to rely on the partner community to bring us a lot more opportunity than we’d be able to get to on our own,” he said. “And there are some capabilities we need to enhance or introduce to make that process even easier … whether it’s tools to help with quoting or account management, or fixing things that we know in our business that we need to get better at.”


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