A federal bankruptcy judge has blessed the reorganization plan for New Vision Television, so all that remains is FCC approval. The TV group’s reorganization took only 60 days, but leaves its senior lenders holding almost all of the company’s equity.
For employees, advertisers and viewers of the 14 New Vision stations in nine markets, there should be no noticeable change. The same management team remains in place. Even the ownership isn’t changing much as far as the FCC is concerned. The HBK hedge fund had over 96% of the voting interest before and that now goes to 100%. But its equity interest has changed a lot. The company’s lenders, led by UBS, are converting about $370 million in loans to non-voting equity, 99% of equity, leaving HBK with 1%. HBK is also getting nothing for the loan it made to New Vision, and likewise for the mezzanine lenders.
But, with more than $400 million of debt wiped off its books by the bankruptcy court, New Vision is no longer one of broadcasting’s overleveraged companies. CEO Jason Elkin and other top executives have new employment contracts, although their previous 3.7% equity stake is no more.
“New Vision has reached an important milestone,” said Elkin. “As we began this restructuring process, we promised our employees, our viewers and our advertisers that New Vision wouldn’t miss a beat, and we haven’t. Our daily business hasn’t been impacted at all: Jobs and benefits for our employees are intact; advertisers have continued to receive top customer service; and our stations have continued to invest in best-of-class news coverage and other programming. Now, with the Court’s approval of our reorganization plan, the way is clear for New Vision to emerge from this restructuring process in the very near future – as a financially strong and agile company, with great employees, loyal advertisers, committed local audiences, and valuable geographic and network diversification among our stations,” he concluded.