Constellis Group Pushed to The Brink of Bankruptcy
The loss of key government contracts and a reduction in US diplomatic security have pushed Constellis Group to the brink of bankruptcy, according to The Wall Street Journal.
Tensions in the Middle East were too late to save Constellis Group. Constellis has defaulted on its loans and agreed to a forbearance pact with lenders. Apollo Global Management LLC., the owner of Constellis, lost $455 million in the process.
Lenders are expecting to take control from Apollo in a $1.2 billion debt restructuring deal. Apollo purchased Constellis in 2016 when it dominated as one of the largest security contractors in the US State Department Worldwide Protective Services Program.
Increased competition ran Constellis profit margins down while competitors reaped gains from government contracts. Furthermore, in 2018 the State Department decreased spending on diplomats by 19 percent to $3.76 billion.
Loss of key government contracts and a reduction in US diplomatic security have pushed Constellis Group to bankruptcy.