Media upstart Vice Media LLC and home security company Monitronics International Inc. were among at least seven firms filing for US Chapter 11 bankruptcy protection in the past 24 hours as companies feel the crunch from a year of interest hikes.
(Bloomberg) — Media upstart Vice Media LLC and home security company Monitronics International Inc. were among at least seven firms filing for US Chapter 11 bankruptcy protection in the past 24 hours as companies feel the crunch from a year of interest hikes.
The wave of bankruptcies comes as companies struggle to re-negotiate burdensome debtloads accumulated during the era of ultra-low interest rates. Others filing Chapter 11 petitions include KKR’s Envision Healthcare Corp., British chemical producer Venator Materials Plc, oil producer Cox Operating LLC, Kidde-Fenwal Inc. and Athenex Inc.
Companies from all sectors have been struggling with higher interest costs, making it more challenging for them to refinance loans and bonds coming due. In an environment of higher rates, companies are also facing more scrutiny from investors and creditors.
For Vice Media, the filing marks a dramatic fall from its status as a media darling. The company secured a $450 million investment from private equity firm TPG in 2017, which valued the firm at $5.7 billion — a startling figure for a newcomer. Journalism has been an easy target for advertisers’ cost-cutting plans in an uncertain economy.
For others, like Venator and Monitronics, the breaking point came amid looming debt maturities in the next few years.
Here’s more details of the wave of recent filings:
Vice Media Â
Vice 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. The company struck a deal to sell itself to creditors including Fortress Investment Group, Soros Fund Management and Monroe Capital. The deal, which will see the investors purchasing its assets for $225 million and assume significant liabilities, allows for rival bidders to emerge.
MonitronicsÂ
Monitronics, which had more than $1 billion in debt coming due in 2024, said earlier this month that it planned to start a Chapter 11 bankruptcy to help implement its restructuring. The company said it would cut its debt by $500 million under the pre-arranged and partially prepackaged plan.Â
The Dallas-based firm previously filed for bankruptcy back in 2019, with a plan that gave control to creditors and allowed it to slash close to $1 billion in debt. The company listed $1 billion to $10 billion in estimated assets and the same range for liabilities in its petition filed in the Southern District of Texas.Â
Envision HealthcareÂ
Envision, a medical staffing company backed by KKR, had been in talks about restructuring options after it skipped a bond coupon payment due in mid-April.Â
The company raised more than $1 billion in fresh cash just last year, but it has still been struggling to make good on its debt obligations in the face of a higher interest burden and wage inflation. It filed in the Southern District of Texas, listing both assets and liabilities in the range of $1 billion to $10 billion.
Venator Materials
Venator’s upcoming debt maturities included a roughly $350 million first-lien term loan due in August 2024 and around $600 million of notes due in 2025. In February, the company commented on challenging macroeconomic conditions, and said it had reduced spending and planned to cut inventory. It listed both assets and liabilities in the range of more than $1 billion to $10 billion in a petition filed in Southern Texas.
Cox Operating
Cox, a closely held oil producer, had been attempting to reach an agreement with its creditors on reducing or deferring payments to avert filing for bankruptcy, people familiar with knowledge had told Bloomberg earlier this month. The company has estimated liabilities and assets of $100 million to $500 million each, it said in a filing.Â
Athenex
Pharmaceutical company Athenex Inc. said it had reached agreement with its lenders to move forward with an expedited sales process of its assets across its primary businesses, which is expected to conclude by July 1. The company has $100 to $500 million in estimated liabilities.
Kidde-Fenwal
Fire protection systems manufacturer Kidde-Fenwal said it will seek options including a sale of the company as a going concern. The company has $1b to $10 billion in estimated liabilities.
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