CIT Group, that provides financing to small businesses and middle market companies, with the support of its debtholders, has received approval from the board of directors to proceed with the pre-packaged plan of reorganisation for CIT Group and a subsidiary that will restructure the company’s debt and streamline its capital structure.
Accordingly, CIT’s board of directors approved the company to proceed with the voluntary filings for CIT Group and CIT Group Funding Company of Delaware with the US Bankruptcy Court for the Southern District of New York (the Court). Under the plan, CIT expects to reduce total debt by approximately $10 billion, significantly reduce its liquidity needs over the next three years, enhance its capital ratios and accelerate its return to profitability.
None of CIT’s operating subsidiaries, including CIT Bank, will be included in the filings. As a result, all operating entities are expected to continue normal operations during the pendency of the cases. Approximately 85% of the company’s eligible debt participated in the solicitation, and nearly 90% of those participating supported the prepackaged plan of reorganization.
Jeffrey Peek, chairman and chief executive officer of CIT Group, said: “The decision to proceed with our plan of reorganisation will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the US economy. This market-based solution allows CIT to enter into the reorganisation process well-prepared and positioned for a swift emergence.”
