Skillsoft opens bankruptcy proceedings to reduce its debt

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Large learning software company Skillsoft has announced that it has filed for Chapter 11 bankruptcy to help meet $ 2 billion in debt.
The company said it has entered into a “restructuring support agreement” with its lenders that will help reduce debt to $ 410 million. This will return 96% of the ownership of the business to its major creditors and 4% to secondary creditors, who will also have the option to purchase up to 15% of the equity of the newly reorganized business. Chapter 11 “prepackaged” procedures involve the company preparing a financial reorganization plan with its creditors that will come into effect when the company enters Chapter 11. The company, which acquired the SumTotal talent development suite in 2014 , filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware, where it listed both assets and liabilities in the range of $ 1 billion to $ 10 billion. The company said it did not expect there to be a “material disruption” to suppliers, partners or employees. Its major lenders have agreed to provide $ 60 million in financing to ensure liquidity during the restructuring process. John Frederick, Executive Director of Skillsoft, said: “Today’s announcement marks an important step in significantly strengthening Skillsoft’s capital structure and positioning the company for long-term success. “Although our core business remains strong, with attractive profitability and cash flow characteristics, our debt levels are too high. We need to invest more and this requires our debt level to drop to free up money to further improve our offerings. “We look forward to a stronger balance sheet and increased financial flexibility as we continue to invest in new products, solutions and content to drive value for our customers and the growth of the business. ”

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