Katerra has voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
The construction technology firm has secured commitments for $35 million in Debtor-in-Possession (DIP) financing from SB Investment Advisers (UK) Limited to fund operations during the Chapter 11 process.
“While a number of negative factors have led to Katerra’s current challenges, we are implementing initiatives on multiple fronts to maximize value and provide the best path forward for Katerra and its many stakeholders,” said Katerra chief transformation officer Marc Liebman.
“Our multi-step action plan has rapidly evolved and includes consolidating U.S. activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process. We are grateful to the extraordinary ongoing work and support of the Katerra team and other core constituencies through this extremely difficult time.”
Katerra recently notified its key stakeholders that many of its U.S. projects will be demobilizing. In keeping with Katerra’s ongoing commitment to the safety of the site and the general public, the company is working to ensure a safe transition.
The rapid deterioration of the company’s financial position is the result of the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business.
Katerra acquired Vancouver-based Equilibrium Consulting Inc and Michael Green Architecture in 2018.
In a statement, MGA said, “We are sad for the many people impacted by this decision. However, we are grateful that these actions have no impact on our operations, other than the movement of MGA shares back into our control. We are fortunate that we have been insulated from Katerra’s challenges because principals Michael Green and Natalie Telewiak have been and remain the controlling directors of the firm.”
