Industry News
RHD Ready to Exit Bankruptcy With New Name
January 15, 2010 - This week R.H. Donnelley's reorganization plan was approved by U.S. Bankruptcy Judge Kevin Gross in Delaware, setting the stage for it to exit bankruptcy within the next few weeks.
Of course once it exits from bankruptcy, its old stock shares will be worthless as creditors, who are owed about $6 billion in unsecured debt, will receive virtually 100 percent ownership of the business under the court plan. The unsecured creditors will be left with about $300 million in debt.
Although the company has improved its debt situation significantly (the plan reduces Donnelley's debt by $6.4 billion, reducing its annual interest expenses by over $500 million) its ongoing revenue picture remains challenging. The company's revenue fell 18% to $534 million in Q3, with ad sales dropping 21% across the 28 states RHD publishes in.
Donnelley will emerge with "a stronger financial foundation," said CEO David Swanson, in prepared statements. But company spokespeople still aren't ready to discuss their post-bankruptcy business strategy.
One item they did reveal was a new name for the company: Dex One. Ken Clark, Publisher of the YP Talk newsletter was quoted in the local News & Observer paper (link) that: "Donnelley is always going to be linked to a company whose stock went from 80-something to zip." He also cautioned that consolidating under a single brand name could be a good move - if the company can afford to promote the Dex brand post-bankruptcy.
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