Friday , June 18 2021

SoftBank-backed firm files bankruptcy in US

Bloomberg

Construction firm Katerra Inc filed for bankruptcy protection in the US, bookending the implosion of a startup that raised about $2 billion from investors including SoftBank Group Corp.
The company filed Chapter 11 proceedings in the Southern District of Texas court. It estimated liabilities of $1 billion to $10 billion and assets of $500 million to $1 billion. The company said in a separate statement it has secured $35 million of debtor-in-possession financing from an arm of SoftBank, a lifeline to tide it over.
The collapse of Katerra — founded in 2015 with a promise to shake up a staid construction industry — is a stinging defeat for SoftBank, which made a large bet on its transformative potential. Major cash infusions from SoftBank and others helped Katerra grow quickly, in part by acquiring smaller companies.
But integrating those businesses proved difficult, and the company was forced to deal with building delays and issues in trying to perfect its construction modules.
In May, SoftBank founder Masayoshi Son mentioned Katerra among investments where it made mistakes, along with WeWork and Greensill. But he argued that SoftBank’s successes have more than made up for such missteps.
Credit Suisse Group is preparing to sue SoftBank over the collapse of Greensill and about $440 million in funds that Katerra owes the bank’s clients, the Financial Times has reported, citing unidentified people familiar with plans.

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