LONDON: American-Canadian digital media and broadcasting company Vice Media reportedly filed for bankruptcy on Monday ahead of a planned sale to a group of lenders.
The company, whose assets include Vice News, Motherboard, Refinery29, i-D and Vice TV, is expected to be sold to a lender consortium, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital.
The decision to file for voluntary Chapter 11 bankruptcy in the US is seen as a way to cap losses and to facilitate the approximately $225 million takeover, which will provide the capital “in the form of a credit bid for substantially all of the company’s assets” and also assume “significant liabilities” at closing.
Under a credit bid, creditors can swap their secured debt, rather than pay cash, for the company’s assets.
Vice said in a statement that it “expects to emerge as a financially healthy and stronger company” when the process concludes, according to reports.
“Vice serves a huge global audience with a unique brand of news, entertainment and lifestyle content,” said Bruce Dixon and Hozefa Lokhandwala, Vice’s co-CEOs, in the statement.
“This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes Vice such a trusted brand for young people and such a valued partner to brands, agencies and platforms.”
The youth-focused digital publisher said it would continue to operate during bankruptcy proceedings, and expects to complete the sale process within two to three months.
In the court filing the group added that the “company’s international entities, and the Vice TV joint venture with A&E, are not part of the Chapter 11 filing.” And that “Vice’s multi-platform media brands, including Vice, Vice News, Vice TV, Vice Studios, Pulse Films, Virtue, Refinery29 and i-D, will continue to produce and deliver award-winning content across platforms.”
Rumors of the bankruptcy and sale emerged earlier this month, following a major internal restructuring and the cancellation of the group’s flagship program, Vice News Tonight.
The news comes amid a challenging period for several technology and media companies, as they resort to downsizing in recent months due to a turbulent economy and weak advertising market.
In April, BuzzFeed announced it would shut down its news division, while other media companies, including CNN, Vox, and The Washington Post, announced layoffs and closures.
Launched in 1994 as a punk magazine called Voice of Montreal by Shane Smith, Gavin McInnes and Suroosh Alvi, Vice currently operates in more than 30 countries.
Throughout its history, the platform has been lauded as a global success for its ability to produce edgy, youth-focused content across print, events, music, online, TV and feature films. This content has drawn younger audiences to the news and media world.
In 2017, the next-generation media and entertainment platform that once “threatened to supplant legacy media companies” reached a peak value of $5.7 billion.
Vice has had a presence in the Middle East since 2017, when it established a regional office in Dubai and recently announced the opening of its new headquarters and creative agency in Riyadh, from which it is expected to produce content and further expand its footprint in the region.