Eliminates Approximately $1 Billion in Debt in Restructuring
Agreement with Lenders
Source Interlink Companies, Inc. (Nasdaq:SORC), one of the largest
publishers of magazines and online content for enthusiast audiences and
a leading distributor of DVD’s, CD’s, magazines, video games and books
today announced it has reached a restructured agreement with its lenders
to eliminate approximately $1 billion dollars of existing debt and
privatize the company.
Under the agreement, the company’s lenders will cancel nearly $1 billion
of the company’s existing debt and provide approximately $100 million in
additional liquidity. Source Interlink, in agreement with its lenders,
will pay all of its vendors in full and on time if they agree to
maintain current credit and payment terms. To facilitate the
restructuring, the Company filed a lender-approved pre-packaged Plan of
Reorganization under Chapter 11 in the U.S. Bankruptcy Code. The Company
anticipates it will emerge within 35 days.
Source Interlink Chairman and Chief Executive Officer Greg Mays said,
“We couldn’t be more pleased, this restructuring will materially reduce
our interest expense and debt levels, substantially improve free cash
flow and allow us to capitalize on several operational opportunities to
further improve and grow our business.”
“Current management will remain in place, daily operations will continue
as usual, and our employees will continue to do what they do
best---provide exceptional service to our customers. Importantly, all of
our vendors will be paid in full for both pre-petition and on going
charges according to our terms of trade. It’s business as usual at
Source Interlink” Mays added.
Source’s business partners support the restructuring as well. Bob
Castardi, President of Curtis Circulation Company said, “The Curtis
Circulation Company is very encouraged about being a valued trading
partner. Source Interlink Companies’ reorganization will reduce any
concerns going forward as to their financial stability. We at Curtis
embrace the fact Source got out in front of this!”
Michael Sullivan, CEO of CMG, a national distributor of Source stated,
“When Source presented their reorganization plan in detail we were very
relieved to understand the huge debt write off. This will allow CMG to
move forward with new initiatives knowing that Source Interlink
Companies will be in a very favorable financial position.”
As a result of this agreement, Source Interlink has cancelled its
investor call previously scheduled for May 1, 2009.
ABOUT SOURCE INTERLINK COMPANIES, INC.
Source Interlink Companies, Inc. (NASDAQ: SORC), a media and marketing
services company, is a leading U.S. distributor of home entertainment
products and services and one of the largest publishers of magazines and
online content for enthusiast audiences. Source Interlink Media, LLC
publishes more than 75 magazines and 90 related Web sites. Source
Interlink Distribution (SID) services tens of thousands of retail store
locations throughout North America distributing DVDs, music CDs,
magazines, video games, books, and related items. In addition to
distributing more than 6,000 distinct magazine titles annually, the
Company maintains the largest in-stock catalog of CDs and DVDs in the US
-- a combined total of more than 260,000 titles. Supply chain
relationships include consumer goods advertisers, subscribers, movie
studios, record labels, magazine, book, and newspaper publishers,
confectionary companies and manufacturers of general merchandise.
For more information about the reorganization go to www.sourceinterlink.com
and click on the Reorganization Information tab or contact Cynthia
Beauchamp, at (239) 949-7624.
For Source Interlink Companies, Inc.
Cynthia Beauchamp, 239-949-7624
