Ion Media Networks filed for Chapter 11 bankruptcy protection Tuesday, stating it has reached an agreement with several debtholders to swap their debt for equity in a newly capitalized company.
The company, which filed yesterday, said it had reached an agreement with holders of 60% of its first lien secured debt that would extinguish all of its $2.7 billion in legacy debt and preferred stock and recapitalize the company with a $150 million new funding commitment underwritten by a group of first lien holders. Participation in the new funding, 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.
The bankruptcy appears similar to one Charter Communications filed in March.
Ion first announced it was negotiating with lenders and debtholders regarding a possible recapitalization in April.
"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. We look forward to working with all senior debt holders and other stakeholders to facilitate a complete and expeditious restructuring," Ion chairman and CEO Brandon Burgess said in a statement. "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 that its operations will continue normally throughout the restructuring and that it expects to complete the process on an accelerated basis.
In 2007, Ion accepted a tender offer from NBC Universal and Citadel Investment Group that pumped $100 million into its coffers and took the once-public company private.
Moelis & Company LLC is serving as financial advisor to ION and Kirkland & Ellis LLP is serving as legal counsel for the restructuring.
Ion owns and operates about 60 broadcast television stations and its Ion Television network reaches about 96 million cable, satellite and broadcast homes.
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