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Dex Media files prepackaged plan of reorganization

By Thryv Contributor | 05.17.16
Dex Media files prepackaged plan of reorganization

DALLAS, May 17, 2016

Plan overwhelmingly supported by senior lenders

Employees and vendors to be paid in full

All operations continue as usual

Dex Media, Inc. (OTC PINK: DXMM) (the “Company”), one of the largest national providers of local marketing solutions for local businesses, today announced a major step toward completing its financial restructuring by filing a prepackaged plan of reorganization (the “Plan”), along with voluntary petitions, under Chapter 11 of the United States Bankruptcy Code in the U. S. Bankruptcy Court for the District of Delaware (the “Court”). The Company expects, among other things, to receive Court authority to pay employee wages, offer benefits and continue to pay trade creditors and suppliers in the ordinary course of business.

The filing follows the completion of the solicitation process of the Company’s senior secured lenders. The solicitation process resulted in more than 96% of the Company’s senior secured lenders voting in favor of the Plan. The Company expects to complete the restructuring during the third quarter 2016.

“Today’s developments are important milestones in our continued progress toward establishing a capital structure that will support our new strategy and enable our growth,” said Joe Walsh, Dex Media President and CEO. “We have made great strides in improving our print and digital product offerings and are seeing a positive response from the market. Our Plan meets a critical need for our future – a capital structure that will significantly reduce our indebtedness and provide us with the financial flexibility and strength we need to achieve our growth objectives and remain a strong partner to the local businesses we are committed to supporting across the country.”

Mr. Walsh continued: “I want to express my gratitude to all of our employees, clients, vendors and other stakeholders, who have stood by our Company and supported our efforts to meet our financial restructuring objectives.”

The Company’s various pleadings request Court approval for payments to Dex Media’s employees, vendors and other unsecured creditors to continue in the ordinary course with no disruption. The Company did not obtain debtor-in-possession (DIP) financing as it maintains substantial cash balances and continues to generate positive cash flow to fund its ongoing operations.

Additional material terms of the Plan include:

  • Dex Media’s senior secured lenders will exchange their current $2.12 billion of claims for a new $600 million new first-lien term loan; 100% of the equity of the reorganized Dex Media, subject to potential dilution from a management incentive plan; and a cash distribution upon emergence from bankruptcy.
  • The Company’s unsecured noteholders will receive a $5 million cash payment and warrants to purchase up to 10% of the post-reorganized equity.
  • All allowed trade vendor claims will be paid in full.

Dex Media’s legal advisor in connection with the restructuring is Kirkland & Ellis LLP. Alvarez & Marsal North America, LLC serves as its restructuring advisor, and Andrew Hede from Alvarez & Marsal serves as Chief Restructuring Officer. Moelis & Company LLC is the Company’s investment banker for the restructuring. The steering committee of the ad hoc group of Dex Media’s senior secured lenders are represented by Milbank, Tweed, Hadley & McCloy LLP as legal advisor and Houlihan Lokey as financial advisor in connection with the restructuring. JPMorgan Chase Bank, N.A. and Deutsche Bank Trust Company Americas, as agents under the senior secured credit agreements, are represented by Simpson Thacher & Bartlett LLP as legal advisor to the agents.

The restructuring support agreement, Plan and related Chapter 11 materials are available at http://dm.epiq11.com/DexMedia.

About Dex Media

Dex Media (OTC PINK: DXMM) is a full-service media company offering integrated marketing solutions that deliver measurable results. As the marketing department for hundreds of thousands of local businesses across the U.S., Dex Media helps them win, keep and grow their customer base. The company’s widely used consumer services include the DexKnows.com® and Superpages.com® search portals and mobile applications as well as local print directories. For more information about the company, please visit www.DexMedia.com. 

Forward-Looking Statements

Some statements included in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “project”, “outlook” and similar statements of a future or forward-looking nature identify forward-looking statements. You should not place undue reliance on these statements, as they are not guarantees of future performance. Forward-looking statements provide current expectations with respect to our financial performance and future events with respect to our business and industry in general. Forward-looking statements are based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: the Company’s ability to obtain Court approval with respect to motions in the Chapter 11 cases; the effects of the Court rulings in the Chapter 11 cases and the duration and outcome of the Chapter 11 cases in general; risks associated with third party motions in the Chapter 11 cases, which may interfere with the ability to consummate the Plan; increased administrative and restructuring costs related to the Chapter 11 cases; the Company’s ability to maintain adequate liquidity to fund operations during the Chapter 11 cases and thereafter; the Company’s future operating and financial performance; the occurrence of any event, change, or other circumstance that could give rise to the termination of the restructuring support agreement; our ability to retain existing business and obtain and retain new business;  general economic or business conditions affecting the markets we serve; our ability to attract and retain key managers; increased competition in our markets; and our ability to obtain future financing due to changes in the lending markets or our financial position. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts

Abernathy MacGregor
Chuck Burgess, 212-371-5999
clb@abmac.com
or
Rivian Bell, 213-630-6550
rlb@abmac.com