Reports over the weekend indicated that hibu’s (formerly Yell) creditors were preparing to take control of the debt-laden publisher. According to a report in the Guardian UK:
The Sunday Times reported over the weekend that Hibu’s creditors are on the brink of appointing US restructuring firm Houlihan Lokey to advise on a debt-for-equity swap. That would likely leave shareholders with very little value, which explains why the shares are now trading at less than 1p.
On Monday, the company declined to comment but earlier this month it said it would form a committee of lenders – including Goldman Sachs, Deutsche Bank and Royal Bank of Scotland – to find a way of reducing the company’s £2.2bn pile. Then last Friday, Hibu said the lenders had granted the company a waiver that would prevent any breaches of its lending covenants.
Reuters reports that the lender committee would include Alcentra, GE Capital, Gruss Asset Management, Blackstone’s credit asset manager GSO, Royal Bank of Scotland and Soros Fund Management.
It’s not clear how or whether this would affect hibu’s current strategy or executive team. My guess is that there would be changes, however.
While hibu is conceptually headed in the right direction with its focus on services for SMBs I have questioned the company’s ability to execute the new strategy. There’s also the enormous challenge of building a new brand at a time of very intense competition.
September 5th, 2012 at 3:50 am
This is a very serious matter.
Whilst most of the legacy YP’s are heavily burdened with debt, this is the first I’ve heard of banks moving in and taking over. Greg do you have any examples of similar cases in the past?
September 6th, 2012 at 4:46 pm
Private equity have obviously owned YPs in the past and currently do with the former AT&T in the US. The mentality may be quite similar.