(Bloomberg) -- Platinum Equity-backed Aventiv Technologies has told investors there’s been interest from multiple parties to purchase the prison-phone company as it faces a December deadline to reach a buyout deal or face potential bankruptcy.
The firm updated investors during a Wednesday call, at which it reported slight revenue and earnings growth for 2024 so far, according to people familiar with the situation who asked not to be identified discussing a private matter. Management said it has received interest from those looking to buy the entire company and not just parts of Aventiv, they added. Those parties weren’t identified.
If Aventiv doesn’t secure a sale agreement worth at least the amount of the company’s outstanding debt, it could pivot toward a potential Chapter 11 filing with lenders likely taking control of Aventiv per a March agreement with creditors, the people said. It had total debt of around $1.67 billion as of June, some people said.
The company’s $1 billion first-lien term loan that matures Nov. 1 rose 2 cents on the dollar Friday morning to a fresh eight-month high of 95 cents, building on Thursday’s five-cent rally, according to data compiled by Bloomberg.
Aventiv has to sell itself as part of that March deal with creditors, Bloomberg reported at the time. As part of milestones to remain in compliant with that agreement, Aventiv met a September deadline to obtain a buyout bid that would cover the debt, the people said.
A representative for Aventiv declined to comment while messages left with Platinum were not returned.
March’s transaction also rearranged Aventiv’s debt stack and provided it with an additional $40 million of capital through new debt. At the time, lenders provided an eight-month extension of more than $1 billion of debt with November maturity dates, including the first-lien term loan.
Platinum Equity bought Aventiv in 2017 for $1.6 billion, but the phone-service provider has been under scrutiny and pressure for some time.
The Federal Communications Commission in July approved rules that cut phone- and video-call rates for incarcerated people. The company filed a request in federal court last week for a stay of the rules pending judicial review, saying they will inflict “irreparable harm” on Aventiv.
(Updates loan price in the fourth paragraph.)
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