The filing aims to safeguard the future of the struggling media group.
American-Canadian digital media company VICE Media Group has agreed to sell the company to a consortium of its lenders, including Fortress Investment Group, Soros Fund Management and Monroe Capital, for approximately US$225 million in the form of a credit bid. Upon completion of the sale, the consortium will also take on substantial liabilities associated with the company.
Launched in Canada in 1994, VICE Media Group is a prominent multi-platform media player with offices in multiple countries. It operates through five main divisions: VICE.com, VICE Studios, VICE TV, the News division and Virtue.
The media company has taken steps to facilitate its sale by filing for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. The sale of VICE Media Group is subject to approval and the possibility of higher bids from external parties. VICE has filed for approval under Section 363 of the U.S. Bankruptcy Code to facilitate the process, allowing outside parties to submit higher bids. The transaction is contingent upon obtaining approvals from the Bankruptcy Court, antitrust authorities and other relevant legal entities.
VICE has also secured debtor-in-possession (DIP) financing from the Lender Consortium and permission to utilize over US$20 million in cash collateral. DIP financing is crucial for companies going through Chapter 11 bankruptcy, enabling them to maintain their operations. The company expects that this financing, together with the ongoing cash flow from its operations, will sufficiently support its activities throughout the sale process, which is projected to conclude within the next two to three months.
VICE Media Group’s multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29 and i-D, will continue producing and delivering content across platforms. International entities and the VICE TV joint venture with A&E Networks are not part of the Chapter 11 filing. The company’s Co-Chief Executive Officers, Bruce Dixon and Hozefa Lokhandwala, expressed confidence in the court-supervised sale process, which aims to strengthen the company, attract new ownership and eliminate legacy liabilities.
VICE has filed customary motions with the U.S. Bankruptcy Court to ensure uninterrupted operations, including paying employee wages, benefits and vendor invoices. The company expects court approval for these motions and aims to complete the sale process within the next two to three months.
The digital media industry is experiencing significant challenges, with Vice Media Group’s recent declaration of bankruptcy and Buzzfeed’s decision to shut down its news division and announce a wave of layoffs. These developments highlight the growing difficulties faced by digital media companies as they grapple with an evolving landscape and shifting market dynamics.
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