Yellow Pages parent company wins court deal to restructure debt
Large directories company Hibu plc, formerly Yell Group plc (including The Yellow Pages and yell.co.uk) has secured a debt restructuring deal following its administration.
The UK Court of Justice has allowed the deal which will mean Hibu and its subsidiaries will continue to carry on trading, although certain stipulations have to have been met. As a result of the ruling Hibu will reduce its borrowing from £2.3 billion to £1.5 billion and will operate under a new parent company formed by their lenders.
Effectively £700 million of their debt will be released with the remainder restructured, which will allow them to pay off debt over the medium-term future. £500 million in loans will mature in five years with a further £920 million ‘payment in kind’ notes to mature in 10 years’ time.
Hibu have been badly hit by stiff competition from the Internet over the recent years, and although they moved their main directory online the huge loss to their paper-based business meant revenue dropped dramatically. Year-on-year figures for 2012 dropped by around half suffered a further drop of around the same percentage in 2013.
Not only were sales figures dropping but a number of acquisitions during the early and mid-naughties meant the company’s expenditure rose just before its net revenue were set to decrease, the combination of which meant heavy losses. Its largest acquisition to date was Spain’s Telefonica Publiciad e Informacion in 2006 for 3.10 billion Euros.
Shareholders have voiced concerns over the deal however no official appeal has been made.