Vice Media filed for bankruptcy on Monday and has struck a deal for its assets to be purchased by creditors.
The company was once valued at $5.7 billion, but a group of Vice’s lenders, which include Fortress Investment Group and Soros Fund Management, have submitted a bid for $225 million. The company’s existing loans cover that bid.
By filing for bankruptcy, outside parties can submit higher or better bids for the company.
According to a Vice Media Group website explaining the company’s restructuring, “All of VICE’s multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29 and i-D, will continue to produce and deliver award-winning content across platforms.”
Vice expects to continue paying employees regular wages and benefits without interruption. The company said that “vendors and other suppliers will be paid in full “under normal terms for goods and services provided on or after the date of the bankruptcy filing.”
“VICE has obtained commitments for debtor-in-possession (‘DIP’) financing from the Lender Consortium, as well as consent to use more than $20 million of cash that constitutes the cash collateral of the Lender Consortium,” the website explained. “VICE anticipates that this financing, as well as the cash generated from ongoing operations, will be more than sufficient to fund the business throughout the sale process.”
According to the company, the sale is expected to be completed within two or three months.
“VICE serves a huge global audience with a unique brand of news, entertainment and lifestyle content,” said Bruce Dixon and Hozefa Lokhandwala, VICE’s Co-Chief Executive Officers, in a press release.
“This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms,” Dixon and Lokhandwala’s statement continued. “We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE.”
A New York Times report on the filing notes that “investments from media titans like Disney and shrewd financial investors like TPG, which spent hundreds of millions of dollars, will be rendered worthless by the bankruptcy, cementing Vice’s status among the most notable bad bets in the media industry.”