05.20.2009 03:55 PM
ION Files for Bankruptcy
WEST PALM BEACH, FLA.: ION Media Networks has filed for Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York, listing assets of around $10 million and liabilities of more than $1 billion. A total of 117 subsidiaries also filed.
The filing is a result of a restructuring agreement reached with a group owning 60 percent of ION’s first-lien senior secured debt. The deal will wipe out more than $2.7 billion in legacy debt and preferred stock. The agreement calls for the group of to underwrite a new $150 million funding commitment to recapitalize the company.
Participation in the new funding commitment, part of a $300 million facility that converts into equity upon completion of the restructuring, will be made available to all holders of ION’s first-lien senior secured debt.
“We are pleased with the support from our first lien senior debt-holders to resolve the company’s legacy debt issues and fund our television growth plans,” Brandon Burgess, ION chairman and CEO, said. “We look forward to working with all senior debt-holders and other stakeholders to facilitate a complete and expeditious restructuring. We are positioning the business for growth and will emerge from the restructuring in a strong position to serve viewers, clients, and stakeholders.”
ION said it will continue operating in the normal course through the financial restructuring process, and provide uninterrupted service to viewers and clients. In light of the pre-negotiated restructuring supported by holders representing a majority of its outstanding first-lien debt, ION said it expects that to complete the process on an accelerated basis.
Moelis & Company LLC is serving as financial advisor to ION and Kirkland & Ellis LLP is serving as legal counsel for the restructuring. – Deborah D. McAdams