Vice files for bankruptcy protection amid cut-price sale to consortium
Vice files for bankruptcy protection amid cut-price sale to consortium –
Vice, the once high-flying media startup that reached a peak valuation of nearly $6bn (£5bn), has filed for bankruptcy protection in the US as the digital publisher engineers a cut-price sale to a group of lenders.
The company, whose assets include Vice News, Motherboard, Refinery29 and Vice TV, has agreed a sale to a consortium that includes Fortress Investment Group, Soros Fund Management and Monroe Capital for $225m in the form of a credit bid for its assets as well as assuming Vice’s “significant liabilities”.
Creditors can swap their secured debt, rather than pay cash, for the company’s assets. Vice said it “expects to emerge as a financially healthy and stronger company” when the process concludes.
Under the deal, which also has a provision that Vice could still be sold to a third party if a higher bid emerges, the lenders are also providing more than $20m and other financing to fund Vice throughout the sale process.
The sale, which is expected to conclude in two to three months, comes after years of financial difficulties and executive turmoil at Vice.
“This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth,” said Bruce Dixon and Hozefa Lokhandwala, co-chief executive officers at Vice. “We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business.”
Vice, which hit a valuation of $5.7bn in 2017 as media giants including Rupert Murdoch, WPP and Disney clamoured for a slice of its youth appeal, had been seeking a sale of about $1.5bn.
In April, the company – which has been evaluating its future since plans to float using a special purpose acquisition vehicle (Spac) collapsed two years ago – announced it was cancelling its popular Vice News Tonight as part of a restructuring that could make more than 100 staff being made redundant.
In February, Fortress, the company’s debt holder, extended a $30m funding line to let Vice pay overdue bills to vendors. The same month, Nancy Dubuc, who took over as chief executive from controversial co-founder Shane Smith in 2018, announced her surprise departure.
Vice, which began as a punk magazine in Montreal almost three decades ago, expanded into digital media and TV by striking deals with firms including Sky and HBO.