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A year after completing its special purpose acquisition with FirstMark Horizon Acquisition Corp. to go public, Starry Group Holdings, an internet service provider, said Tuesday that it filed for bankruptcy in efforts to reduce its debt while maintaining customer and network operations in five cities.
Under its pre-packaged Chapter 11 restructuring agreement, the Boston-based company said it is working with lenders “to move swiftly through the restructuring process.”
In the past year, Starry’s share price has gone from nearly $11 per share down to pennies, with over 6 million shares changing hands on the news Tuesday.
“Over the last several months, we’ve taken steps to conserve capital and reduce costs in order to put Starry in the best position to explore various financing paths for the company,” said Chet Kanojia, Starry’s CEO, in a written statement. “Our next step in this journey is to continue to strengthen our balance sheet through a Chapter 11 restructuring process.”
As part of the bankruptcy motion, lenders have offered the company $43 million in financing to “provide Starry with the necessary liquidity to continue its normal business operations and meet its post-filing obligations to its employees, customers and vendors,” the company said.
Starry has been engaged in cost-cutting measures for some time. Starry laid off about half of its workforce, about 500 people, last October. At the time, Kanojia, speaking about the company’s cash burn, said that because the company didn’t “have the capital to fund our rapid growth,” it was going to focus on its core business of serving multi-tenant buildings in bigger urban markets.
That was followed by an announcement in January that the company was leaving the Columbus, Ohio market where it had been since 2021.
The company currently operates in Boston, New York City, Los Angeles, Denver and Washington, D.C. and reported nearly 91,300 customers at the end of September.
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