March 5 (Bloomberg) -- Ziff Davis Media Inc., the publisher of PC Magazine and the video-game magazine EGM, filed for bankruptcy protection with a plan to swap debt for new equity.
Ziff Davis Media plans to swap $225 million of existing senior debt for a new $57.5 million senior secured note and at least 88.8 percent of the common stock in the reorganized company. The New York-based company has a debt-restructuring agreement with senior noteholders, it said today in a statement. Subordinated noteholders haven't agreed to the restructuring.
``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 Chief Executive Officer Jason Young said in the statement.
Holders representing more than 80 percent of Ziff Davis Media's outstanding senior floating-rate notes have agreed to the company's restructuring plan and will provide $24.5 million to fund operations during the Chapter 11 reorganization and after the company emerges from bankruptcy, according to the statement.
The restructuring provides for 11.2 percent of the reorganized company's common stock to be distributed to holders of its subordinated unsecured notes if holders of those notes vote to accept the restructuring.
Equity Cancellation
Current equity in the company would be canceled under the plan, said company spokesman Andy Brimmer of the public relations firm Joele Frank Wilkinson Brimmer Katcher.
Willis Stein & Partners LP and affiliated funds, based in Chicago, own 85.6 percent of the current common stock in the parent company Ziff Davis Holdings Inc. DLJ Diversified Partners LP and its affiliates hold the remaining 14.4 percent, Ziff Davis Media said in court papers.
The company said in papers filed with the U.S. Bankruptcy Court in Manhattan that it had assets of $100 million to $500 million and debt of $500 million to $1 billion.
Ziff Davis Media filed for bankruptcy with six affiliates and said Deutsche Bank Trust Co. Americas was its largest unsecured creditor. Deutsche Bank is the trustee for $152.5 million in compounding notes due 2009 and $12.3 million in 12 percent subordinated notes due 2010, Ziff Davis said in court documents.
Ziff Davis Holdings also filed for Chapter 11 reorganization. Ziff Davis Media said it plans to emerge from bankruptcy protection this summer.
Young said in an interview that advertising pages at the company's technology magazines have decreased dramatically since a leveraged buyout by Willis Stein in April 2000.
Debt Load
``What stayed constant was the debt load that reflected a very different time for our company,'' Young said.
Most of Ziff Davis Media's revenue now comes from digital products including its 1UP Network video-game information sites, he said.
Subordinated noteholders didn't approve the restructuring plan because of a disagreement ``about who should get what part of the equity,'' Young said.
Ziff Davis Media is represented by law firm Winston & Strawn. Its financial and restructuring adviser is Alvarez & Marsal.
The case is In re Ziff Davis Holdings Inc, 08-10771, U.S. Bankruptcy Court, Southern District New York (Manhattan).
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6bISm6.ln5E&refer=home
Ziff Davis Media plans to swap $225 million of existing senior debt for a new $57.5 million senior secured note and at least 88.8 percent of the common stock in the reorganized company. The New York-based company has a debt-restructuring agreement with senior noteholders, it said today in a statement. Subordinated noteholders haven't agreed to the restructuring.
``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 Chief Executive Officer Jason Young said in the statement.
Holders representing more than 80 percent of Ziff Davis Media's outstanding senior floating-rate notes have agreed to the company's restructuring plan and will provide $24.5 million to fund operations during the Chapter 11 reorganization and after the company emerges from bankruptcy, according to the statement.
The restructuring provides for 11.2 percent of the reorganized company's common stock to be distributed to holders of its subordinated unsecured notes if holders of those notes vote to accept the restructuring.
Equity Cancellation
Current equity in the company would be canceled under the plan, said company spokesman Andy Brimmer of the public relations firm Joele Frank Wilkinson Brimmer Katcher.
Willis Stein & Partners LP and affiliated funds, based in Chicago, own 85.6 percent of the current common stock in the parent company Ziff Davis Holdings Inc. DLJ Diversified Partners LP and its affiliates hold the remaining 14.4 percent, Ziff Davis Media said in court papers.
The company said in papers filed with the U.S. Bankruptcy Court in Manhattan that it had assets of $100 million to $500 million and debt of $500 million to $1 billion.
Ziff Davis Media filed for bankruptcy with six affiliates and said Deutsche Bank Trust Co. Americas was its largest unsecured creditor. Deutsche Bank is the trustee for $152.5 million in compounding notes due 2009 and $12.3 million in 12 percent subordinated notes due 2010, Ziff Davis said in court documents.
Ziff Davis Holdings also filed for Chapter 11 reorganization. Ziff Davis Media said it plans to emerge from bankruptcy protection this summer.
Young said in an interview that advertising pages at the company's technology magazines have decreased dramatically since a leveraged buyout by Willis Stein in April 2000.
Debt Load
``What stayed constant was the debt load that reflected a very different time for our company,'' Young said.
Most of Ziff Davis Media's revenue now comes from digital products including its 1UP Network video-game information sites, he said.
Subordinated noteholders didn't approve the restructuring plan because of a disagreement ``about who should get what part of the equity,'' Young said.
Ziff Davis Media is represented by law firm Winston & Strawn. Its financial and restructuring adviser is Alvarez & Marsal.
The case is In re Ziff Davis Holdings Inc, 08-10771, U.S. Bankruptcy Court, Southern District New York (Manhattan).
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6bISm6.ln5E&refer=home
