The plan aims to significantly reduce its senior secured debt and financially strengthen the company for the future. The restructuring agreement provides that the company’s senior lenders will exchange a substantial portion of the company’s $1.6 billion in senior secured debt for equity and provides for a transfer of ownership of the company to the lender group.
As part of the agreement in principle, RDA anticipates implementing the restructuring under court supervision through a voluntary pre-arranged filing under Chapter 11 of the United States Bankruptcy Code, which it expects to complete swiftly. The filing is for the US businesses only and will not have any effect on the company’s international operations in Europe (including the UK), Canada, Latin America, Africa, Asia, and Australia-New Zealand, which are adequately funded to continue to operate “business as usual.”
The company says its business operations continue to be strong, and it outperformed many competitors in fiscal 2009 (not yet reported), for which the company expects that, despite the global recession, revenues only declined by low single digits, currency neutral.
