Yellow Media makes agreement to settle debt swap dispute

Yellow Media has reached a settlement to resolve a dispute over terms of a proposed debt-for-equity swap by the struggling publisher of online and paper directories. The Montreal-based company said Wednesday the new plan will provide holders of its convertible debt with new debentures as well as more share purchase warrants than under the previous […]

Yellow Media has reached a settlement to resolve a dispute over terms of a proposed debt-for-equity swap by the struggling publisher of online and paper directories.

The Montreal-based company said Wednesday the new plan will provide holders of its convertible debt with new debentures as well as more share purchase warrants than under the previous plan.

In addition, Yellow Media has agreed to pay interest on the outstanding debentures that was due Oct. 1.

Under a settlement with a committee of debtholders, the new plan calls for Yellow Media to provide a total of $2.5 million of new debt securities and 200,000 warrants in addition to what it had previously offered in the recapitalization.

Yellow Media had previously offered a total of 500,000 new common shares and 285,714 warrants that can be used to purchase additional Yellow Media shares.

Related
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Yellow Media says majority of shareholders, debtholders OK debt plan
• Yellow Media lenders trying to thwart recapitalization plan

Under the revised proposal, investors would also theoretically pay less to exercise the warrants – with the price reduced to $28.16 per share from $29.25 – if the new stock of a recapitalized company rises above that level.

Under the revised recapitalization plan, each convertible debenture with $1,000 face value would receive 2.5 new common shares, about 2.4 warrants and new debentures with $12.50 in face value.

Yellow Media owns a number of publications including Yellow Pages print directories, YellowPages.ca, Canada411.ca and RedFlagDeals.com.

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