Business News
VERTIS COMMUNICATIONS OBTAINS CONFIRMATION OF REORGANIZATION PLAN; CLEARS WAY FOR MERGER WITH AMERICAN COLOR GRAPHICS
Wednesday 27. August 2008 - Vertis Expects to Emerge From Prepackaged Chapter 11 in Mid-September
Vertis Communications (“Vertis”) announced today that it has received confirmation of its prepackaged reorganization plan. American Color Graphics also obtained confirmation of its reorganization plan today. The confirmation orders signed by the Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware in Wilmington paves the way for the closing of Vertis merger with American Color Graphics. Vertis will close the merger and emerge from its prepackaged Chapter 11 on the “Effective Date” of the prepackaged plan, which is expected to occur in mid-September.
“This is a landmark day in the history of Vertis,” said Mike DuBose, chairman and CEO of Vertis. “We have completed the next step toward successfully restructuring our balance sheet and the merger of American Color Graphics into Vertis. When our prepackaged plan becomes effective, our teams will be ready to create a combined company that offers even more solutions to our customers by building on the already unparalleled service for which Vertis is known.”
Vertis has maintained business as usual during the restructuring, including paying vendors in the ordinary course of business. The company will continue normal operations through the remainder of the case and pay all trade creditors in the ordinary course without interruption, DuBose said. Under the prepackaged plan, trade creditors are being paid in full.
Vertis filed a prepackaged reorganization plan on July 15, 2008 to effectuate the merger with American Color Graphics. American Color filed its own prepackaged reorganization plan that same day. The merger will close at the same time both prepackaged plans become effective.
As previously announced, the Vertis reorganization plan includes a $250 million Senior Secured Revolving Credit exit facility from GE Commercial Finance and a $400 million exit facility from Morgan Stanley Senior Funding, Inc., as lead arranger.
The focal point of the reorganization plan is the agreement between Vertis and American Color Graphics, two of the largest printing and premedia companies in North America, to merge American Colors operations into Vertis nationwide marketing and printing services platform. The merger will allow both companies to enrich their core advertising inserts and newspaper products manufacturing capabilities. It will also enable both Vertis and American Color to offer an unprecedented scope of premedia and workflow solutions to customers.
The consensual financial restructurings will reduce the combined companys debt obligations (including the off-balance sheet accounts receivable facility and approximately $248 million of Vertis Holdings Mezzanine Notes) by approximately $1 billion before transaction fees and expenses. The noteholders of Vertis and American Color Graphics will exchange their bonds for an aggregate of $550 million in new notes and substantially all of the new equity in the merged company.
“I want to thank all of our employees for their hard work and dedication during the restructuring,” DuBose said. “They demonstrated an unwavering focus on client support and its that kind of commitment that makes Vertis special. I also want to acknowledge our customers and supplier partners, who have maintained their relationships with us throughout the process. With our stronger finances, we anticipate even more opportunities for all of our stakeholders.”