Vertis back in bankruptcy, to cut $700 million of debt

By Santosh Nadgir

BANGALORE (BestGrowthStock) – U.S. marketing services provider Vertis Holdings Inc (VRTH.PK: ) filed for bankruptcy for the second time in a little over two years, to wipe out more than $700 million of debt from its balance sheet.

The Baltimore, Maryland-based company first filed for Chapter 11 in July 2008 and emerged out of bankruptcy later that year, still highly leveraged and at the peak of the financial crisis.

In court papers filed late on Wednesday, Vertis said its debt exchange offer launched in April had failed.

According to its latest pre-packaged restructuring proposal, Vertis is looking to convert all its second-lien and senior payment-in-kind (PIK) notes into equity in the reorganized company, reducing 60 percent of its debt.

Second lien lenders holding more than 98 percent of the notes have voted to accept the reorganization plan while senior PIK lenders holding almost 100 percent of the notes have agreed to support the proposal, it said in a statement.

Vertis said it had received commitments for $600 million in financing for the restructuring, including a $425 million term-loan from Morgan Stanley Senior Funding Inc and a $175 million revolving credit from GE Capital.

“Vertis has also received commitments for up to $100 million of new common equity, pursuant to its previously announced private placement and the associated backstops,” the company said.

It has also lined up $200 million in debtor-in-possession (DIP) financing to fund operations while in bankruptcy.

Vertis expects to get the reorganization plan confirmed by the court within 45 to 60 days.

The company has about $1.49 billion in assets and debt of about $1.56 billion. It employs more than 5,000 people across North America.

Vertis is one of the largest offset printers in North America and provides marketing services to some Fortune 1000 companies including American Express (AXP.N: ) and Macy’s (M.N: ).

(Reporting by Santosh Nadgir; Editing by Gopakumar Warrier)

Vertis back in bankruptcy, to cut $700 million of debt