TV technology provider KIT Digital is set to file for bankruptcy, in a move to recapitalise the company put its core operating into newly formed group called Piksel.
The firm said that as part of its reorganisation plan its three largest shareholders had agreed to file for Chapter 11 bankruptcy in the US – a move that allows firms to reorganise their business affairs and assets and is generally filed by corporations that need time to restructure their debts.
Through the plan, KIT Digital said that it “expects to be in a position to pay all vendors, suppliers and other holders of valid pre-petition claims.” It said that the chapter 11 would only impact the “non-operating parent company Kit Digital” and that its subsidiaries, including Ioko 365, Polymedia, Kewego, Multicast and Megahertz will not be impacted. These will make up the new entity, Piksel.
“We are pleased to announce this comprehensive solution that will provide KIT with relief from the financial, legal, and regulatory issues currently encumbering it,” said non-executive chairman of the KIT Digital board, William V. Russell.
“The plan allows all shareholders the opportunity to participate in the future growth of the company and at the same time it will complete the company’s restructuring by strengthening the balance sheet and positioning it for profitable growth.”
Interim chief executive officer Peter Heiland added: “By moving the core businesses forward together unburdened by the issues currently plaguing the corporate parent, our customers and products can once again become the sole focus of this exciting business.”
KIT’s bankruptcy filing is expected to happen by April 24.