Yellow pages publisher R.H. Donnelley files for bankruptcy
Posted May 29, 2009 7:49 a.m. EDT
Updated May 29, 2009 9:05 a.m. EDT
Cary, N.C. — R.H. Donnelley, one of the nation’s largest yellow pages publishers, filed for bankruptcy Thursday.
The voluntary Chapter 11 filing in a federal bankruptcy court in Delaware is the latest in a streak of bad news for the company.
Mounting losses and mountains of debt turned its stock (OVTC: RHDC) into one worth pennies. In its court filing, Donnelley listed assets of $11.9 billion and debts of $12.4 billion. Its stock closed at 14 cents Thursday. Its 52-week high is $5.67.
In a statement issued Friday morning, Donnelley said the bankruptcy would enable it to “consummate a balance sheet restructuring.”
The company said it has more than $300 million “in cash” and projects' “positive” cash flow so it does not plan to seek additional financing.
"Our growth-through-acquisition strategy never anticipated the cataclysmic collapse of the U.S. economy and the local advertising market,” David Swanson, Donnelley’s chairman and chief executive officer, said in a statement. “As a result of these developments, earlier this year we began negotiating with our lenders to restructure our debt and provide the company with a more sustainable capital structure that reflects the current economic realities.”
The publisher has struck an “agreement in principle” with “key debt holders for a reorganization plan t that would reduce debt by $6.4 billion and cut annual interest payments by $500 million, according to the statement.
“Throughout the restructuring process, R.H. Donnelley will be conducting ‘business as usual’ and does not anticipate any interruptions in the services it provides to its more than 500,000 valued customers across the U.S.,” the statement continued.
Among Donnelley’s largest creditors are Bank of New York Mellon and U.S. Bancorp.
Donnelley recently missed a debt payment of $55 million and sought forbearance from its creditors until May 29.
Earlier this month Donnelley reported a first-quarter net loss of $401 million with revenues declining 11 percent.