Ziff Davis Media Files Bankruptcy
Things have gone from bad to worse for publishing house Ziff Davis Media and its Private Equity owner Willis Stein. Bankruptcy is now official.
Under mounting debt, things have been bad for some time. Last year the troubled company sold off their enterprise division ($160m in June). In August, they announced they’d be unable to make interest payments on their mounting debt. Today’s news that the company will seek Chapter 11 bankruptcy protection to try and sort out the mess was a foregone conclusion.
If the bankruptcy plan is approved by US Bankruptcy Court for the Southern District of New York, the publisher of PC Magazine and other media channels will exchange $225m of senior debt for a new $57.5m note and at least 88.8% of the company’s common stock. The remaining 11.2% of the company’s common stock will be assigned to unsecured note holders.
To fund continuing operations through the process $24.5m has been set aside.
CEO Jason Young said in a statement that the restructuring “goes a long way toward resolving the burdens of debt load and capital structure established seven years ago, during a leveraged buyout of the company.” (Willis Stein Partners bought Ziff Davis in 1999 for almost $800m. It’s the one media company currently in the private equity firms portfolio)
Alvarez and Marsal is providing the company with financial advice. Winston & Strawn is providing legal counsel.
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