VICE Media has filed for Chapter 11 bankruptcy, a process which is likely to result in the sale of the company to Fortress Investment Group and Soros Fund Management for US$225 million.
This announcement comes shortly after the company shuttered VICE World News and cancelled VICE News Tonight, its flagship news television programme, which resulted in more than 100 layoffs across the newsroom.
In a release to the press, VICE Media Group stated that it agreed to the terms of an asset purchase agreement with a consortium of its lenders.
For now, the company will continue to operate normally during the Chapter 11 process.
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The filing is the latest in a series of blows to the company, which once took funding at a US$5.7 billion valuation. In 2019, the company raised US$250 million in debt from investors including Fortress and George Soros's Soros Fund Management.
The Chapter 11 filing states that VICE's management "has determined that it is advisable and in the best interest of the Vice Group Companies to enter into a stalking horse agreement for the sale of substantially all assets and related auction procedures".
A "stalking horse" agreement is when a potential buyer is in place in advance of a bankruptcy filing, according to VICE Media Group.
In an official statement, VICE Media Groups’ CEOs Hozefa Lokhandwala and Bruce Dixon said that 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.
"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,” the statement said.
Over the years, VICE has taken on a series of high-profile investments which led to the expansion of the company but also created a list of companies expecting a return on their investment, as stated by VICE. Consequently, this led to the accumulation of debt, which according to the company's chief restructuring officer, Frank Pometti, led to its bankruptcy.
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