Ziff Davis Media, whose assets include PC Magazine and EGM, filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of New York. It said it has reached an agreement with an ad hoc group of noteholders on its plan to restructure.
Ziff Davis Media expects operations to continue as usual during the reorganization process and to emerge from Chapter 11 this summer. During the restructuring process, vendors and business partners should expect to be paid for post-filing goods and services provided to the company.
As part of the restructuring, the ad hoc noteholder group has agreed to provide up to $24.5 million to fund Ziff Davis Media’s operations while the company is in Chapter 11.
The restructuring, if approved by the court, would reduce Ziff Davis Media’s $225 million senior-note debt. That amount will be exchanged for a new $50 million (face amount) senior secured note and at least 88.8% of the common stock in the reorganized company. In aggregate, the company has a total of $400 million in debt.
“This agreement underscores our senior secured noteholders’ confidence in our ability to position ourselves for continued profitable growth,” said Jason Young, CEO of Ziff Davis Media, in a news release. “Today’s restructuring agreement goes a long way towards resolving the burdens of a debt load and capital structure established seven years ago, during a leveraged buyout of the company.”
Ziff Davis Media also announced that, despite good faith negotiations with certain of its subordinated unsecured noteholders, the company has been unable to reach a consensual agreement with them.