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Before this announcement, Vice Media had begun to restructure its global organizational workforce.
American-Canadian digital media company Vice Media Group has filed for Chapter 11 bankruptcy after several years of financial struggle. The company, which was valued at $5.7 billion in 2017, is currently worth less than $1 billion. Top executives of the media giant have failed to give any detailed evaluation of the company’s net worth.
Vice Media’s lenders are planning to take on administrative control of the company through necessary filings. These lenders include Fortress Investment, Soros Fund Management, and Monroe Capital. About five companies have previously shown interest in purchasing the media company.
Vice Media Bankruptcy Filings
Vice Media has completed filing for Chapter 11 bankruptcy with the US Bankruptcy Court for the Southern District of New York. After the approval of the application, interested parties can bid for the company. The inclusion of credit bids will allow the new administrators to swap secured debt for company assets instead of paying in cash. Notably, the consortium’s bid includes a commitment fee of $20 million in cash to cater to the company’s daily activities throughout the sale process. The sale process is expected to last for 2-3 months.
The bankruptcy filing covers Vice Media’s multi-platform media brands like Vice News, Vice TV, Pulse Films, Virtue, Refinery29, and i-D. It does not include Vice’s international entities and Vice TV’s joint venture with A&E.
During a short interview with Vice Co-CEOs, Bruce Dixon and Hozefa Lokhandwala, it was mentioned that the sale process would enhance the company’s affairs and prepare it for long-term growth.
“We will have new ownership, a simplified capital structure, and the ability to operate without the legacy liabilities that have been burdening our business.”
Vice Media’s Restructuring
Before this announcement, Vice Media had begun to restructure its global organizational workforce. Over the last few months, Vice Media has laid off many workers to slim down their cost of production.
According to the media company, any group intending to purchase her assets will provide $225 million in the form of a credit bid. The fees will also cover some of Vice’s significant liabilities.
Vice Media is not the only digital company forced to restructure its organization due to bankruptcy. Buzz Feed (NASDAQ: BZFD), a global media and technology company, has shut down its news broadcast division and laid off a larger number of its workers. Generally, the low revenue generation in the media space is caused by the sluggish economy and weak advertising market.
Vice began its journey as a magazine that addresses youth-related issues and invariably gained an outstanding presence on social media. The then-thriving company is filing for bankruptcy, which was indirectly caused by the spike in online advertisement championed by Google and Meta. Last year, the media company fell below its targeted revenue mark by more than $100 million.
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