Cengage Files for Chapter 11 Bankruptcy Protection
Cengage Learning Inc filed for bankruptcy protection more than five years after a buyout led by Apax Partners LLP. The buyout left the book publisher with around US$5.8 billion in debt. Under the deal, the company will try to make use of the bankruptcy case to get rid debt worth US$4 billion. This was stated today in a released statement by Cengage.
In a phone interview, Chief Executive Officer Michael Hansen said today that their balance sheet is absolutely not fit for the purpose as there is too much debt incurred by the textbook publisher. He added that after Cengage Learning come out of the restructuring plan, they would be in good position with a very sound balance sheet. Further, Hansen said that the company would have a lot of room to accommodate investment.
In a filing with the US Bankruptcy Court in Brooklyn today, Cengage Learning billed itself as the second largest publisher of college course material in the US. The company listed more than US$1 billion worth of assets.
Apax led a US$7.75 billion acquisition deal of Cengage Learning in 2007. The acquisition was from Thomson Reuters Corp said Cengage. Apax has been buying the company's debt at a discount which could possible the London based publisher more influence during the restructuring.