Ziff Davis was facing a $15 million interest payment due Monday on $250 million worth of senior subordinated notes that the company couldn't cover alone.
Bart Catalane, Ziff Davis' chief operating officer and chief financial officer, said Willis Stein and the publisher won up to a $40 million extension on $181 million of bank debt. The extension, he said, will essentially be covered by Willis Stein, which will buy a chunk of the debt.
Ziff Davis will immediately be able to use $16 million.
The leading lender for Ziff Davis is CIBC World Markets.
The $250 million worth of notes is due 2010. The next payment is due July 15. While the company apparently can now make that payment, Mr. Catalane said he did not hold out much hope for the tech markets turning around by then, or anytime in the foreseeable future.
"A lot of people characterize it as bumping along the bottom," he said. "Some categories look a little bit better. Others look a little bit worse. No one will call a trend."
The publisher also hired bankers Greenhill & Co. LLC to assist them in debt reduction, although Mr. Catalane denied that this may mean immediate divestitures.
Not selling assets
"We are not looking at any sale of assets," he said. "We are looking at talking to banks and bondholders about a way of recapitalizing the debt."
Mr. Catalane said the company posted positive Ebitda -- earnings before interest, taxes, depreciation and amortization -- for what he called its "core publishing holdings." But he conceded that was not the case for titles CIO Insight, Baseline and Net Economy or its Internet division.
One executive familiar with Ziff Davis put the publisher's situation this way: "You're in the boat. And the boat is leaking. And there's sharks all around you. As long as you can stay in the boat, stay. There's no advantage to anyone doing anything else."
Mr. Catalane was nonplussed to such sentiments in the marketplace. "Those people predicting our demise don't understand Willis Stein and apparently don't understand the value of the franchises and the brand equity we've got here. And most importantly, they underestimate the ability of the management team.
"It's good to be the underdog. If [doubt about the company's prospects] is the case, then great. Underestimate us."
Pressed on the company's specific long-term prospects, Mr. Catalane said, "Our goal is to double the size of the business within three years."