The US publisher of The National Enquirer has said that it will file for bankruptcy protection within a fortnight as part of a financial restructuring programme.
American Media – which also publishes Men’s Fitness and a string of other celebrity titles in the US – said it would file for Chapter 11 protection ahead of a planned debt-for-equity swap with a group of its bondholders.
The company said last night that approximately 80 per cent of its bondholders had agreed to the proposal which would:
‘significantly de-lever its balance sheet and improve its already strong cash flow and cash on hand, and ultimately will improve the growth and success of the company”
American Media did not reveal the amount of debt that would remain on its balance sheet as David Pecker, chairman, president and chief executive, claimed it would be ‘business as usual’at the company during the restructuring programme.
Last year, American Media, which is backed by private equity firms Evercore and Thomas H Lee Partners, reduced its debt from $1.1bn (£685m) to $850m by exchanging bonds for equity, the BBC reported.
The New York Times said that pre-packaged bankruptcies like this usually allow for a quick restructuring:
‘Unlike many other bankruptcies, which can play out for months and sometimes years while a company and its lenders squabble over agreements to pay financial obligations, creditors and debtors have a working agreement before a pre-packaged bankruptcy.”