Cubic Corp, the transport technology and defence services group backed by Elliott Investment Management and Veritas Capital, has informed lenders that it intends to defer an upcoming interest payment as it seeks to manage near-term liquidity, according to a report by Bloomberg.
The report cites unnamed people familiar with the matter as saying that the company plans to delay payment on a portion of its debt, around seven months after completing a balance sheet restructuring that reduced borrowings and included a fresh equity injection from its private equity owners.
According to Bloomberg, Cubic declined to comment, while Elliott and Veritas did not immediately respond to requests for comment.
The move follows a July agreement with creditors that cut debt levels and extended maturities, alongside $170m in new equity funding. At the time, S&P Global Ratings said the transaction would improve the sustainability of Cubic’s capital structure, having previously flagged concerns over its heavy debt burden and operational underperformance linked to supply chain disruption, contract delays and restructuring costs.
Cubic currently carries approximately $2.5bn of debt, according to Bloomberg data. Some of the company’s loans were recently quoted at around 38 cents on the dollar, highlighting ongoing investor concerns around credit quality.
While the company has secured several recent defence contracts – including agreements with the US Air Force and Canada’s Department of National Defence – its transportation division has faced setbacks. Transport for London recently awarded a major fare systems contract to Spain’s Indra Sistemas, ending Cubic’s long-standing role operating the Oyster and contactless payment systems.
