New creditor deal gives Yellow Media time to revamp
The fate of Yellow Media Inc. is in the hands of its creditors, after the company proposed a radical restructuring that would see its $1.8-billion debt reduced by hundreds of millions of dollars and its common shareholders pushed aside in favour of its banks and bondholders.
While profitable, the Montreal-based company Yellow Media is staring down $700-million in debt repayments over the next year at a time when its revenue is in freefall.
The company is also investing heavily to reinvent itself in a bid to compete with Internet directory heavyweights such as Google Inc. and Microsoft.
The phone book and online directory publisher said Monday it had reached an agreement with about 30 per cent of its bondholders for a deal that would reduce the amount it owes and extend the time it has to pay it back. New shares would be issued, and the company’s existing shareholders would only own 17 per cent of the recapitalized company.