BearingPoint offers bondholders some reassurance
- By Nick Wakeman
- Nov 06, 2006
BearingPoint Inc. got a little more breathing room last week to sort out its financial troubles. The McLean, Va., company announced Nov. 3 that it had reached an agreement with a majority of its bondholders that resolved concerns that the company is in default.
The agreement means that BearingPoint will pay a higher interest rate and has to make timely filings with the Securities and Exchange Commission. The company has struggled to make its filings for the past two years, and has not yet filed its 10-K report, the official, annual business and financial report public companies must submit to SEC, for 2005.
Company officials said they plan to make the 10-K filing by Thanksgiving, and conduct its annual shareholders' meeting in December.
A New York state court ruled in September that, because BearingPoint had not filed its 2005 annual report, it was in default of several of its bonds. The company is appealing that decision.
The agreement reached with its bondholders is contingent on the New York lawsuit being dropped by the bondholders who sued the company.
The company also said it amended a $150 million credit facility to extend deadlines for filing its SEC reports for 2005.
In addition to the financial struggles, BearingPoint recently learned that it will have to compete to continue providing the General Services Administration with Homeland Security Presidential Directive-12 services.
GSA announced Nov. 1 that was not exercising its option to extend the $104 million contract and will recompete the work. The agency said the decision was not related to BearingPoint's performance.
Instead, GSA wants to hold another competition because of changes in the marketplace for HSPD-12 products and services.
BearingPoint ranks No. 23
on Washington Technology's 2006 Top 100
list the largest federal IT contractors.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.