UK tipped to avoid recession; Vice files for bankruptcy protection – business live

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The Brooklyn-based company listed both assets and liabilities in the range of more than $500 million to as much as $1 billion in a Chapter 11 petition filed in Southern District of New York. Fortress Credit Corp. ranked among the biggest secured creditors, with claims totaling about $475 million.

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The move caps a tumultuous few months for the firm. Vice shuttered its flagship TV news show and laid off more than 100 staff in late April.

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The FT points out that Vice was once-feted, but is now proposing to sell its business to a consortium of its lenders:

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The group, which is home to Vice News, Motherboard, Refinery29 and Vice TV, was once among the hottest new-media start-ups, winning a multibillion-dollar valuation based on its popularity with millennials attracted to an often anarchic style that reflected its roots as a punk magazine in Montreal.

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However, the group has struggled to turn its mix of news, entertainment and lifestyle into lasting financial success, undermined by audiences’ shift back to more traditional media groups and the tightening grip of tech giants such as Facebook on digital advertising in recent years.

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The New York Times (one of those ‘more traditional media groups’) dubs Vice a “decayed digital colossus”, adding:

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Vice, which had wooed media giants, has struggled to adjust to the punishing realities of digital publishing. A group of creditors could buy Vice for $225 million.

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Vice, the global news publisher and TV company that was once valued at nearly $6bn (£5bn), has filed for bankruptcy protection.

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The company, whose assets include Vice News, Motherboard, Refinery29 and Vice TV, has announced it has applied for Chapter 11 in the US Bankruptcy Court for the Southern District of New York.

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Vice has also agreed a deal with a consortium of its lenders, including Fortress Investment Group, Soros Fund Management and Monroe Capital.

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They have agreed to buy almost all Vice’s assets for $225m, and taken on some of its liabilities.

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Vice says it:

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Expects to Emerge As a Financially Healthy and Stronger Company in Two to Three Months.

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The sale process is likely to take two to three months. Vice expects to be given permission to keep paying employees wages and benefits, and to keep paying vendors and suppliers.

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Vice says its multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29 and i-D, will continue to operate.

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Its international entities, and the VICE TV joint venture with A&E, are not part of the Chapter 11 filing.

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Vice began as a punk magazine in Montreal almost three decades ago, before expanding into digital media and TV striking deals with companies including Sky and HBO.

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The move into Chapter 11 follows sales talks with multiple companies in an attempt to avoid filing for bankruptcy, according to the New York Times earlier this month.

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BruceDixon and HozefaLokhandwala, VICE’s Co-Chief Executive Officers., explain:

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“This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms.

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We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE.”

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“,”elementId”:”dcdcc2fd-9a1e-4b45-8fa9-f194bd264dc3″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/media/2023/may/01/vice-media-group-bankruptcy-report”,”text”:”Vice Media reportedly headed for bankruptcy”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”8503d34c-9677-4a13-abb1-e5c4f9fbf6bd”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1684133576000,”blockCreatedOnDisplay”:”07.52 BST”,”blockLastUpdated”:1684134925000,”blockLastUpdatedDisplay”:”08.15 BST”,”blockFirstPublished”:1684134926000,”blockFirstPublishedDisplay”:”08.15 BST”,”blockFirstPublishedDisplayNoTimezone”:”08.15″,”title”:”Vice files for Chapter 11 bankruptcy protection”,”contributors”:[],”primaryDateLine”:”Mon 15 May 2023 08.41 BST”,”secondaryDateLine”:”First published on Mon 15 May 2023 07.50 BST”},{“id”:”6461c5f88f089152205dba2b”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

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Hopes that the UK will avoid recession this year are rising, after the economy performs better than expected so far this year.

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Forecasters at the EY Item Club have predicted this morning that the UK will grow by 0.2%% during 2023, rather than contracting as previously forecast.

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That improvement is due to falling inflation, lower-than-expected energy bills and a resilient jobs market, they say, with UK inflation expected to start falling sharply from its current double-digit levels.

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Anna Anthony, UK financial services managing partner at EY, comments:

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“We’re still on the path to economic recovery and many businesses and consumers – particularly the most vulnerable in society – continue to face significant cost-of-living pressures.

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This cannot be underestimated, and appropriate support must still be provided, but we are in a more optimistic place than we were a few months ago.

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The recession that many thought was inevitable is now likely to be avoided and energy prices have fallen, boosting consumer and business sentiment.

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“,”elementId”:”c6a870e2-37e5-4603-aead-2eb8cca8fbce”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

This improving economic outlook means EY now expects higher bank lending this year, and next.

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Total UK bank loans to businesses and households are expected to rise 1.2% this year, upgraded from a 0.1% fall forecast in February, with further growth of 2.1% forecast for 2024.

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Anthony says economic conditions expected to improve over the course of 2023 and into 2024:

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“While encouraging, enthusiasm should be measured, in the short-term at least. UK banks continue to face a tough environment with historically low lending growth rates.

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However, the sector is in a strong capital position and continues to provide ongoing support to customers, businesses and the wider economy.

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On Friday, we learned that UK GDP grew by 0.1% in the first quarter of this year, a better outcome than feared a few months ago when high energy prices and the chaos of the mini-budget were hitting the economy.

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The Bank of England has also upgraded its forecasts last week, six months after warning that the UK faced the longest recession in half a century. Now, though, GDP is expected to be 2.25 percentage points higher than previously forecast over the next three years

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Electronics retailer Curry’s has added to the cheery mood this morning, by raising its profit outlook for the last financial year.

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It now expects to make adjusted pre-tax profits of £110-120m in the year ending 29 April, up from previous guidance of around £104m.

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Curry’s says that trading in the UK and Ireland has been “better than expectations, especially in the final two months of the year”.

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Profits have been bumped up by “continued gross margin improvements”, and cost efficiencies, it says.

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But, like-for-like sales in the UK and Ireland were down 7% year-on-year, and fell 10% over the year in Nordic regions, where trading woes have hit the group.

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Curry’s says:

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Nordics trading environment remains challenging, but under new management we have made progress on margins and costs.

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Also coming up today

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Investors are watching Turkey closely, where yesterday’s election appears to be heading for a runoff. With the count continuing, neither president Recep Tayyip Erdoğan or his main rival Kemal Kılıçdaroğlu appear likely to reach the 50% threshold to win the presidential race outright.

“,”elementId”:”58f4f893-18ad-4a00-a0de-b5e49c0af401″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/world/live/2023/may/14/turkey-elections-live-vote-recep-tayyip-erdogan-kemal-klcdaroglu”,”text”:”Turkey elections live: runoff increasingly likely amid competing claims from Erdoğan and Kılıçdaroğlu”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”fc1c2baf-7a6d-44af-a929-67a9f3380710″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/world/2023/may/14/turkish-polls-close-after-record-numbers-vote-in-test-of-erdogans-rule”,”text”:”Turkish election could go to second round as Erdoğan attempts to claim victory”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”59cd2310-1fd6-4a5b-a83e-70330234f133″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

We’re also expecting the EC to publishes its spring economic forecasts this morning, with new predictions for gross domestic product, inflation, employment and public finances.

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The agenda

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• 9am BST: EC spring economic forecasts

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• 10am BST: Eurozone industrial production for March

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• 11am BST: Spanish consumer confidence for April

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• 1.30pm BST: New York Empire State Manufacturing Index index for May

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Key events

Vice files for Chapter 11 bankruptcy protection

Vice, the global news publisher and TV company that was once valued at nearly $6bn (£5bn), has filed for bankruptcy protection.

The company, whose assets include Vice News, Motherboard, Refinery29 and Vice TV, has announced it has applied for Chapter 11 in the US Bankruptcy Court for the Southern District of New York.

Vice has also agreed a deal with a consortium of its lenders, including Fortress Investment Group, Soros Fund Management and Monroe Capital.

They have agreed to buy almost all Vice’s assets for $225m, and taken on some of its liabilities.

Vice says it:

Expects to Emerge As a Financially Healthy and Stronger Company in Two to Three Months.

The sale process is likely to take two to three months. Vice expects to be given permission to keep paying employees wages and benefits, and to keep paying vendors and suppliers.

Vice says its multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29 and i-D, will continue to operate.

Its international entities, and the VICE TV joint venture with A&E, are not part of the Chapter 11 filing.

Vice began as a punk magazine in Montreal almost three decades ago, before expanding into digital media and TV striking deals with companies including Sky and HBO.

The move into Chapter 11 follows sales talks with multiple companies in an attempt to avoid filing for bankruptcy, according to the New York Times earlier this month.

BruceDixon and HozefaLokhandwala, VICE’s Co-Chief Executive Officers., explain:

“This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms.

We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE.”