Last week we shared that the Wall St. Journal report that said Cengage Learning (as in Gale/Cengage) was likely to file for bankruptcy protection as early as this week.
Well, the WSJ was correct and Cengage Learning filed for bankruptcy earlier today.
Cengage Learning fully expects to maintain normal business operations throughout the restructuring process, with no expected disruptions to our relationships with our customers, authors, employees, business partners and vendors.
Cengage Learning Inc, a large U.S. textbook publisher, on Tuesday filed for bankruptcy protection, as part of a prearranged restructuring it said will help it eliminate more than $4 billion of debt.
Cengage said it won support from a group of first-lien lenders for the restructuring, which would eliminate more than two-thirds of the Stamford, Connecticut-based company’s roughly $5.8 billion of debt. Non-U.S. units are not part of the bankruptcy case.
“Our balance sheet is absolutely not fit for purpose, there is too much debt,” Chief Executive Officer Michael Hansen said today in a phone interview. “After we come out of this restructuring, we feel we’ll be in a very good position, with a very sound balance sheet, and a lot of room to continue to invest in the business.”
Cengage, with headquarters in Stamford, Connecticut, reported an 18 percent drop in sales for the six months ended Dec. 31.
In the past, too much investment was directed to print at the expense of digital, Hansen said. Under new management, Cengage is focused “squarely on digital” and faculty and student users.
Bankruptcy Info from Gale/Cengage
Cengage Learning plans to make timely paymentto vendors for goods and services provided to the Company during its restructuring in the normal course of business. It is anticipated that employees will continue to receive their usual pay and health and welfare benefits.
Gale intends to continue providing outstanding products and content to libraries, just as we have been for more than half a century. Subscription renewals will continue providing value to our customers and their users tomorrow, next month and in the years ahead.
Our Portico archiving program remains an excellent resource to ensure the security of our content for customers.
Primary Documents–Court Filings
Note: Filing #1 includes list of Top 30 Creditors Holding Largest Unsecured Claims