GTT Proposes Some Recovery for Equity in Bankruptcy Plan (1)

GTT Communications Inc. is closing in on a plan to hand ownership of the telecommunications firm to lenders through bankruptcy, while maintaining some value for shareholders, according to people with knowledge of the matter.

Under the proposal, lenders would receive the majority of the shares in the reorganized company while bondholders would get equity plus warrants, according to people with knowledge of the matter. Existing shareholders would also be entitled to some warrants, according to one of the people, who asked not to be identified discussing confidential matters.

GTT’s plan is a response to a restructuring agreement that lenders ...