Update May 14: More on This Story in a New Library Journal Article by Meredith Schwartz
Cengage Learning Inc., the educational publisher owned by Apax Partners LLP, said it’s seeking to negotiate with creditors on a restructuring plan and may need to file bankruptcy as part of its turnaround efforts.
“We will seek to negotiate the terms of a comprehensive restructuring transaction with our key creditor constituents and quickly implement the restructuring plan,” Chief Executive Officer Michael Hansen said today on a conference call after the company reported third-quarter results.
“The Chapter 11 process can be an effective way of achieving a fast and efficient debt restructuring with minimal disruption to the business, particularly where agreement is reached with key financial stakeholders on a plan — on the outlines of a plan –prior to the filing,” Hansen said.
Hansen, who joined the publisher in September, has revamped management and shifted to more digital products and subscriptions to help revive revenue as students increasingly move away from buying new textbooks. The company is cutting costs and ending some incentives that encouraged early ordering, Hansen said today. That decision will hurt fiscal fourth-quarter sales, he said.
See Also: Michael Hansen’s Prepared Remarks from the Call are Online (PDF)
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