American-Canadian leading digital media and broadcasting company Vice Media has filed for bankruptcy to facilitate its sale, amid a challenging economy and weak advertising market.
The company disclosed that it has agreed to the terms of an asset purchase agreement with a consortium of its lenders which includes Fortress Investment Group, Soros Fund Management, and Monroe Capital. The consortium had submitted a credit bid of about $225 million to substantially all of the company’s assets, in addition to the assumption of significant liabilities upon closing. The sale is expected to go through the next two to three months unless the company receives a better offer.
Vice in its Chapter 11 filing, disclosed estimated assets of between $500 million and $1 billion and also estimated that it had more than 5,000 creditors. Despite its recent filing, the company’s lenders have approved $20 million of funding to keep operations going through the process.
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Speaking on Vice bankruptcy filing, co-chief executive at the company Bruce Dixon disclosed that the accelerated court-supervised sale process will strengthen and position the company 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. We look forward to charting a healthy and successful next chapter at VICE”, he added.
In the past few years, Vice had struggled to consistently record profit and even missed its revenue projection for 2022 by $100 million. The media giant which had once attracted major funding from top media companies such as Disney, Fox, and several others, started facing difficulty after the closure of fellow free digital media groups BuzzFeed News, as ad revenues dried up and both struggled to attract new investments, taking on debt to stay afloat.
The company, which was once valued at $5.7 billion and known for sites such as Vice and Motherboard, had been carrying out restructuring and cutting jobs across its global news business in recent months, amid a sluggish economy and weak advertising market.
In January 2023, the media giant began exploring the possibility of selling the company, which also saw the company’s Vice media CEO Nancy Dubuc, on February 24, 2023, step down from her position as the company faced problems with turning an annual profit and finding a buyer.
Notably, the media giant search for a potential buyer last year, signaled the company’s downfall, while its layoffs also caught attention from the world. Meanwhile, Vice filing for bankruptcy is not in any way expected to interrupt any of its daily operations which includes its flagship website, pulse film division, and agency suite, amongst others.
It is worth noting that Vice was among a generation of fast-rising digital media companies that once threatened to supplant legacy media companies with the recipe for attracting millennial audiences. It was cited as the largest independent youth media company in the world, with 35 offices, which saw it specialize in publishing a magazine that covers information on various subjects, such as sex, drugs, music, fashion, photos, travel, sports, technology, food, and several others.