Vice Media Group officially filed for Chapter 11 bankruptcy protection on Monday, as the digital media publisher to be sold to a group of its creditors led by Fortress Investment Group and Soros Fund Management, marking a dramatic collapse for a company that investors valued at US$5.7 billion (AU$8.5m) just six years ago.
Vice Media filed for Chapter 11 bankruptcy protection on Monday.
Key Takeaways
- In its Chapter 11 filing with the Southern District of New York federal court, Vice Media pegged the value of both its assets and liabilities between $500 million and $1 billion.
- The filing also discloses that Fortress is Vice’s largest secured lender, with a total claim of nearly $475 million.
- The lenders’ consortium looking to acquire Vice Media has submitted a $225 million credit bid to acquire most of Vice’s assets, along with “significant liabilities,” the New York Times reported, citing a statement from the company.
- As part of the deal, the lenders have agreed to lend an additional $20 million to allow the publisher to remain operational during the sales process.
- The sale is expected to go through in the next two to three months unless Vice receives a better offer.
Key Background
The bankruptcy proceedings cap off a dramatic collapse for a company that was once valued at $5.7 billion in 2017 after reportedly having turned down a $3.5 billion acquisition offer from Disney a year earlier. In the past few years, however, Vice had struggled to consistently turn a profit and even missed its revenue projection for 2022 by $100 million.
Late last month, the company announced a major restructuring, including the cancellation of its program Vice News Tonight and layoffs. Vice’s bankruptcy comes just weeks after BuzzFeed announced it was shutting down its news arm entirely, as digital media companies struggle with a declining advertising market and economic headwinds.
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Crucial Quote
In a statement picked up by multiple news outlets, Vice co-CEOs Bruce Dixon and Hozefa Lokhandwala said the sale “will strengthen the company and position Vice for long-term growth,” adding that it would also protect “the kind of authentic journalism and content creation that makes Vice such a trusted brand for young people.”
This story was first published on forbes.com and all figures are in USD.
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