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Katerra, the new U.S. construction company backed by SoftBank’s Vision Fund, filed for bankruptcy with more than $ 1 billion in liabilities, becoming the second leading company in the portfolio of the Japanese conglomerate to go bankrupt. collapse this year.
In a statement, Katerra said it had sought protection from creditors after a “rapid deterioration in the company’s financial situation.” He blamed Covid-19 for the “unexpected insolvency” of its former Greensill Capital lender and the inability to get new financing. The company said it would conduct a marketing and sales process “to maximize value for its stakeholders.”
The bankruptcy is the latest setback for SoftBank’s Vision Fund, which has recently enjoyed strong monitoring of lists of portfolio companies such as Coupang and DoorDash. The Vision Fund reportedly had invested more than $ 2 billion in Katerra, including a cash infusion in December as part of a recapitalization.
Katerra had been a customer of Greensill, the supply chain financing company backed by SoftBank, which collapsed earlier this year. Katerra did not name Greensill in the statement.
Founded in Silicon Valley, Katerra raised billions of dollars in an attempt to reduce construction costs by producing building components in factories rather than on site.
But the company has struggled to contain costs and has faced delays in several major projects. Jointernal drama led to the way out of co-founder Michael Marks for his role as chief executive in May last year.
Katerra said it had received $ 35 million in soft loan financing held by SoftBank, which allowed the company to continue operating while the bankruptcy process unfolded and its international operations would not be affected by the bankruptcy. The company estimated it had assets of between $ 500 million and $ 1 billion and liabilities of between $ 1 billion and $ 10 billion. SoftBank declined to comment.
Court records in the state of Texas showed that Katerra earned $ 1.75 billion in revenue last year. According to LinkedIn, the company has about 2,400 employees.
The collapse of Katerra has sparked tensions between SoftBank and Credit Suisse, which was selling funds that packaged loans originated by Greensill.
Credit Suisse is trying to recover $ 440 million in Katerra-linked debts that were kept in the funds. The Financial Times reported last week that the Swiss bank is preparing for a possible lawsuit against SoftBank, one of its main customers, following the collapse of Greensill.
In November last year, SoftBank provided an emergency cash injection to Greensill to cover debts to Katerra. However, the cash never reached the funds of Credit Suisse as intended, the FT reported.
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