DXM-
Dex Media Said to Prepare for Third Bankruptcy in December
Laura J Keller
LauraJKeller
November 12, 2015 — 2:56 PM PST
Updated on November 13, 2015 — 10:13 AM PST
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Telephone listings firm has $2.3 billion in outstanding debt
Company said to be finalizing Ch. 11 plan with lenders
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Dex Media Inc. is completing a deal with creditors that would put the company into Chapter 11 proceedings in December, the company’s third trip to bankruptcy court in less than seven years, according to two people with knowledge of the matter.
The telephone listings company, which has $2.3 billion of debt, is finalizing the pre-packaged bankruptcy plan with a group of its senior lenders, said the people, who asked not to be named because the talks are private. It plans to solicit support from a wider group of lenders before filing, with a target of the second week of December, they said.
Dex has been negotiating a debt reorganization with holders of its more than $2 billion of loans since at least Sept. 30. The company said earlier this month that it received a proposal from the lender group. Separately, it’s been wrangling with a group of junior bondholders that have considered putting the media company into involuntary bankruptcy after it skipped a Sept. 30 interest payment.
Suzanne Keen, a spokeswoman for Dex, didn’t respond to phone and e-mail messages seeking comment. Ari Cohen, a spokesman for Moelis & Co., an investment bank representing the company along with Alvarez & Marsal Inc., declined to comment. Olivia Clarke, a spokeswoman for the company’s legal adviser Kirkland & Ellis LLP, didn’t provide a comment. Sandra Sokoloff, a spokeswoman for Alvarez & Marsal, didn’t return messages seeking comment.
Representatives for Houlihan Lokey Inc. and Milbank Tweed Hadley & McCloy LLP, which are the advisers representing lenders, declined to comment. Spokesmen for Ducera Partners LLC and Akin Gump Strauss Hauer & Feld LLP, which are advising the junior bondholders, declined to comment or didn’t provide a comment.
Bankruptcy History
The two businesses that formed Dex Media previously went through their own bankruptcies. R.H. Donnelley Corp. filed for Chapter 11 in May 2009, emerging in 2010 as Dex One Corp. with $2.6 billion in debt. Dex One then decided to combine with SuperMedia Inc., another company that emerged from bankruptcy, in August 2012. The combined company filed again in March 2013 to complete the merger through a pre-packaged bankruptcy.
The junior creditor group also is in talks with the company on the bankruptcy proposal, which could give its members some recovery on their investments, said one of the people. The group said in a letter it sent to the company in October that owns a supermajority of the subordinated notes, an important threshold in a bankruptcy proceeding.
Dex Media’s time in bankruptcy would probably be shortened if junior-ranking creditors didn’t oppose its reorganization plan.
The company is already in default because it skipped a interest payment owed Sept. 30 to holders of the subordinated debt. The holders declared that debt immediately due and payable in full, the company said in a Nov. 5 statement.
Its $270 million of 12 percent subordinated notes due January 2017 last traded Nov. 5 at just below 3 cents on the dollar, according to the listing of sales of all sizes provided by Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds closed at 4.9 cents on Oct. 8, the last time more than $500,000 of them traded, the data show.
Dex Media is also in default on its four term loans. A forbearance agreement in place through Nov. 23 with lenders gives the company “additional time to agree on a plan to restructure our debt facilities,” Chief Executive Officer Joe Walsh said in the Nov. 5 statement.
Its second-largest loan, a $590 million obligation, was quoted at 47.6 cents on the dollar, according to prices compiled by Bloomberg. Dex Media shares traded at 13 cents at 1:01 p.m. in New York, and have lost 98.5 percent of their value this year.
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