Report: “Cengage CEO Seeking Restructuring, May File Bankruptcy”
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: Here’s the Cengage Quarterly Earnings Report that’s Referenced in the Article (46 pages)
See Also: Michael Hansen’s Prepared Remarks from the Call are Online (PDF)
Also Embedded Below
See Also: Audio of the Complete Conference Call is Available (Including Q&A)
See Also: Apax Buys $800M in Cengage Debt Ahead of Publisher’s Possible Bankruptcy (via Dow Jones; April 26, 2013)
See Also: Cengage Draws on Credit Line, Hires Restructuring Advisers (via WSJ; March 24, 2013)
About Gary Price
Gary Price (email@example.com) is a librarian, writer, consultant, and frequent conference speaker based in the Washington D.C. metro area. He earned his MLIS degree from Wayne State University in Detroit. Price has won several awards including the SLA Innovations in Technology Award and Alumnus of the Year from the Wayne St. University Library and Information Science Program. From 2006-2009 he was Director of Online Information Services at Ask.com. Gary is also the co-founder of infoDJ an innovation research consultancy supporting corporate product and business model teams with just-in-time fact and insight finding.