CommScope Sued by Lenders for at Least $150 Million Over Alleged Breach

CommScope Holding Co. was sued by a group of lenders who allege the telecommunications provider breached a debt agreement by failing to pay a prescribed premium of at least $150 million following a key asset sale.

The lenders contend that CommScope’s January divestiture of its broadband connectivity and cable unit for $10.5 billion to Amphenol Corp, constituted a sale of substantially all of it assets and therefore triggered an event of default under the terms governing its debt. Such a breach requires CommScope to pay a premium to lenders, according to the court filing dated Tuesday in the New York state court.

The lawsuit also allege that because CommScope used some of the proceeds of the asset sale to repay the principal on the $3.15 billion loan within 18 months of when it was issued, lenders are also owed a separate prepayment premium under the terms of the debt.

In making their claims, lenders also push back against the company’s argument that it doesn’t need to pay the premium because of a so-called change-of-control definition governing the senior notes, which they contend was amended to quash loan protections.

“CommScope breached the covenant of good faith and fair dealing by amending its senior notes indentures for the sole purpose of denying the Term Loan Lenders the Applicable Premium,” according to the lawsuit.

CommScope, now known as Vistance, and creditor legal counsel Glenn Agre Bergman & Fuentes didn’t immediately respond to requests for comment.

The asset sale marked the latest effort by CommScope to reduce its challenging debt load through refinancings and divestitures. In 2024, it agreed to sell its mobile networks businesses for $2.1 billion in cash, using the proceeds to repay debt. Earlier in the same year, the company reached a deal to refinance $4.3 billion in debt with creditors led by Apollo Global Management Inc. and Monarch Alternative Capital.

Following this year’s sale, the remaining company was rebranded to Vistance Networks.

Top photo: The asset sale marked the latest effort by CommScope to reduce its challenging debt load through refinancings and divestitures. Photographer: Thomas Fuller/SOPA Images/LightRocket/Getty Images. Bloomberg.