Tags: Iran | Money | constellis holdings | moodys | blackwater | embassy | baghdad

Moody's: Embassy Contractor Constellis Nears Bankruptcy

Iraqi soldiers stand guard in front of the U.S. embassy in Baghdad, Iraq, on Jan. 1
Iraqi soldiers stand guard in front of the U.S. embassy in Baghdad, Iraq, on Jan. 1. (Nasser Nasser/AP)

By    |   Tuesday, 07 January 2020 05:43 PM

Constellis Holdings, which provides security for diplomats at Embassy Security Firm and others coming and going at the U.S. embassy in Baghdad might enter court supervision by early February after amassing debt over the past decade, according to a report from the credit rating firm Moody's.

Bankruptcy has not been assured, reports CBS News, but Constellis, which traces its roots to the controversial military contractor Blackwater, has liabilities of more than $1 billion and missed a debt payment on December 31, causing it to go into default, Moody's and credit rater Standard & Poor's reports indicate. 

The company is also facing slowing growth, with weaker-than-expected revenue in the last half of 2019. This has resulted in a "sudden and material" drop in cash in the fourth quarter. In addition, Constellis borrowed another $110 million from existing lenders to boost finances, and last Friday, Moody's cut its credit rating and said the company faces a growing risk of bankruptcy. Standard & Poor's also said the problems at Constellis could result in bankruptcy. 

A company spokesperson told CBS MoneyWatch that Constellis plans to "operate our business, execute our business strategy and meet our obligations to our stakeholders."

Constellis' contract with the embassy in Iraq has not changed, a source close to the company said. The company also provides similar services in 30 countries worldwide to both governments and private businesses.

However, Iran's mounting tensions are making some investors in other defense contractors more optimistic. Shares of Northrop Grumman are up by 8%, and Lockheed Martin went up by 5% in the last week and have been buoyed by last week's airstrike that killed Iranian Gen. Qasam Soleimani.

Blackwater, Constellis' predecessor, was involved in the 2007 shootings that killed unarmed Iraqis in Baghdad, leading to the convictions of four Blackwater contractors. A private equity firm run by Erik Prince's former investment manager, Jason DeYonker bout the company and renamed it, and in 2016, another private equity firm, Apollo Global Management, bought Constellis. 

© 2020 Newsmax. All rights reserved.


   
1Like our page
2Share
Newsfront
After amassing debt over the past decade, Constellis Holdings, which provides security for diplomats at Embassy Security Firm and others coming and going at the U.S. embassy in Baghdad might enter court supervision by early February, according to Moody's.
constellis holdings, moodys, blackwater, embassy, baghdad
330
2020-43-07
Tuesday, 07 January 2020 05:43 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved