Haights Cross Looks to Restructure Debt
By Jim Milliot -- Publishers Weekly, 6/16/2009 12:12:00 PM
Haights Cross, parent company of Recorded Books and Triumph Learning/Buckle Down, is in the processing of restructuring its debt, a move that includes a proposal to its investors for a voluntary exchange of its 12.5% senior notes for equity in the company. Under the plan, Haights is offering 120.21 shares of stock for each $1,000 in notes. The company said that Monarch Alternative, which owns 33% of the notes, supports the plan. Deadline for the offering is July 6.
The restructuring plan is the latest effort by Haights to stay afloat. In announcing the offering, Haights said that if the restructuring plan is not approved, the company will explore all other restructuring options, including the possibility of filing for Chapter 11.
In its 10-k report for 2008 filed with the Securities & Exchange Commission last month, Haights said that its financial problems raised questions about its chances to continue as a going concern. The restructuring plan is Haights's attempt to give it more financial breathing room In 2008, the company had a net loss of $38 million compared to earnings of $63.5 million in 2007. Sales inched up to $171 million from $170 million. The Recorded Books division did better than the test prep business with the audiobook publisher reporting a 3.4% sales increase, to $87.4 million, while sales in the test prep division fell 2.7%, to $83.7 million. Recorded Books had an operating profit of $21.2 million, while a $31.6 million charge in the test prep division resulted in an operating loss of $24.7 million in the group.
