Bain-owned cable-box company files for bankruptcy
NEW YORK (AP) — A cable-box repair company owned by the private equity firm Bain Capital is filing for bankruptcy protection, citing weakened demand for its services in recent years.
Contec Holdings Ltd. said Thursday it will continue to operate as usual during its Chapter 11 reorganization. The Schenectady, N.Y.-based company expects to complete the process and reduce long-term debt within 60 days.
The company's reorganization plan was filed in the U.S. Bankruptcy Court for the District of Delaware. It said that lenders have agreed to provide a $25 million credit facility and $35 million in debtor-in-possession financing as part of the reorganization, which will let it make payments to employees and suppliers.
As of July 28, Contec said in its bankruptcy filing that it had about 2,300 employees, the vast majority of them in Mexico. The company says it has 177 employees in the U.S. Contec said no jobs will be impacted by the bankruptcy.
The company, which repairs more than 2 million cable set top boxes a year, was founded in 1978 and last year generated $110.5 million in revenue. In its bankruptcy filing, the company said that "fast-paced and drastic technological and economic changes" have weakened demand for traditional cable services, with revenue and profit margins suffering over the years as a result.
Bain bought its stake in Contec in 2008 from American Capital Ltd.
Republican presidential candidate Mitt Romney was picked to head Bain Capital in 1984, after the firm was spun off from Bain & Co. During his campaign, Romney has pointed to his success at Bain as proof of his business acumen and leadership ability.
The Obama campaign has accused Romney of being a job destroyer because of the factories that Bain closed and the jobs it moved overseas. But Romney has noted that he left Bain in early 1999, shortly before the firm invested in companies that were pioneers of job outsourcing. Romney says he played no role in those transactions and decisions.
Representatives for Contec Holdings and Bain Capital did not immediately return calls for comment.