Airspan falls victim to capex crunch, files for Chapter 11

Under the so-called Restructuring Support Agreement (RSA), Airspan's debt will be cancelled and it will receive $95 million of equity financing from funds managed by Fortress Investment Group. The agreement is backed by 97.4% of the company's creditors.

Airspan said it expects to complete the process on a highly expedited basis, and obtain court approval of the transaction in the next 30-45 days, which will result in Airspan becoming a private company majority-owned by Fortress affiliates.

Under the deal these affiliates have also agreed to provide $53 million of debtor-in-possession (DIP) financing, which will keep the lights on at Airspan during the restructuring process.

"This support agreement is the culmination of a strategic review process, and we believe it is the best path forward for Airspan to continue providing exceptional services and products to our customers worldwide," said CEO Glenn Laxdal. "By strengthening the company financially with new capital and a debt-free balance sheet, we will be better positioned to execute our plan to capitalise on the significant growth opportunities across our public and private network markets. We appreciate the support and engagement of all of our stakeholders as we build Airspan for the future."

Therein lies the problem for Airspan. Those 'significant growth opportunities' – namely private cellular networks and Open RAN – are taking their time to materialise.

They were still growth opportunities in 2021, when Airspan went public in New York under the MIMO ticker following its merger with special purpose acquisition company (SPAC) New Beginnings.

While Airspan has notched up some noteworthy achievements – like Open RAN backer Rakuten deploying 50,000 of its 5G and LTE base stations, and winning a nationwide deal with Reliance Jio – its recent financial performance suggests it hasn't been able to sustain its momentum.

In the three months to 30 September, revenue slumped to $14.3 million, down from $32.1 million in the prior quarter, and $41.1 million a year earlier.

Indeed, Airspan spent a chunk of 2023 trying to shore up its balance sheet.

Last March, it agreed to sell Mimosa Networks to Jio-owned Radisys for $60 million. Mimosa makes point-to-point (PTP) and point-to-multipoint (PTMP) gear for use in backhaul, outdoor broadband, and fixed-wireless access (FWA) networks. While the deal brought in much-needed cash to boost earnings and pay down debt, it won't have done Airspan's top-line any favours.

In May, Airspan further boosted its coffers to the tune of $25 million, by renegotiating the terms of its credit agreement with Fortress. That deal also brought about a change in leadership, with Laxdal – who at that point was serving as COO – replacing Eric Stonestrom as chief executive.

Judging by the bankruptcy filing, these measures have not been enough.

Airspan's recent misfortunes are likely to have been compounded by the global slowdown in operator capex as well.

As Dell'Oro reported last month, in 2023 the market for telecoms equipment declined for the first time since 2017, due to lower 5G and home broadband investments, particularly in North America.

The research firm expects conditions to remain challenging this year. This will heap further pressure on companies like Airspan that are struggling to stay in the game.

"Our significant commitments through this agreement reflect our conviction that a recapitalised Airspan can further solidify its leadership position within the wireless industry," said Drew McKnight, co-CEO and managing partner at Fortress. "We look forward to continuing to support the company's talented management team throughout this process and in the future."