FONT-SIZE Plus   Neg

LodgeNet To File For Bankruptcy - Update

LodgeNet Interactive Corp. (LNET) said Monday it will file for Chapter 11 bankruptcy as per a deal with affiliates of Colony Capital LLC that will invest $60 million in the company.

The move will see Colony Capital gain control over LodgeNet and receive new common stock representing full ownership in the company.

LodgeNet, a provider of on-demand movies to hotels, also said it has received support from a steering committee of its lenders holding its debt for a multi-year extension of its existing $346 million secured credit facility.

LodgNet said Colony Capital has also executed a memorandum of understanding with DIRECTV (DTV), as per which which LodgeNet and DIRECTV plan to operate as strategic partners within the hospitality and healthcare markets. DIRECTV will provide operational, technological and marketing capabilities to help deliver new and improved LodgeNet services.

"The Colony Syndicate's investment and the new credit agreement provide added financial flexibility, while Colony Capital's industry experience and DIRECTV's new contributions will ensure LodgeNet's continued market leadership...," the company said.

Closing of the deal is subject to various closing conditions, including Bankruptcy Court confirmation of a Chapter 11 Plan.

Sioux Falls, South Dakota-based LodgeNet has been incurring losses over the past years, and the company has been facing a number of challenges in regard to Guest entertainment performance and room churn, both of which continue to impact its financial performance. Through the three quarters of 2012, its revenues slid 13 percent from the prior year to $278.7 million.

Stifel Financial Corp. (SF)'s Miller Buckfire division, FTI Consulting Inc. and Moorgate Securities LLC were the financial advisers to LodgeNet, and Weil, Gotshal & Manges LLP and Leonard, Street & Deinard were legal advisers.

LodgeNet closed Monday at $0.052, down 35.00%, on a volume of 5.9 million shares on the Nasdaq.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Apple confirmed that it has bought face animation software firm Faceshift, although it was tight lipped about how it intends to use the new addition. The move is speculated as a bid to expand into virtual reality. Environment ministry of South Korea Thursday ordered Volkswagen Korea to recall 125,522 diesel vehicles on determining actual emissions of nitrogen oxides. The ministry has asked the German automobile maker to pay a fine of 14.1 billion Won or $12.31 million. The company has to submit a recall plan by January 6, 2016. The U.S. Food and Drug Administration has alerted health care professionals and patients of a voluntary recall of compounded multivitamin capsules containing high amounts of Vitamin D3 (Cholecalciferol), distributed nationwide by Glades Drugs in Pahokee, Florida. FDA has received reports of several...
comments powered by Disqus
Follow RTT