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Vertis Holdings on track to complete its recapitalization by year end

Tuesday, December 07, 2010

Press release from the issuing company

Baltimore — Vertis Holdings, Inc. today announced two significant milestones toward the completion of its recapitalization before the end of 2010. The Company has secured overwhelming note holder support for its voluntary, pre-packaged Chapter 11 Plan of Reorganization as well as Court approval for all of its motions heard on December 1, 2010, including authorization to move forward with its contemplated debt and equity financing arrangements.

At the completion of the voting period, nearly all of Vertis’ note holders had accepted the Company’s Plan of Reorganization. This includes unanimous support among the Second Lien note holders who voted, as well as a very favorable 96.2% acceptance rate among the Senior PIK note holders who voted. The proposed Plan will allow Vertis to reduce its debt by approximately 60 percent, or more than $700 million, while substantially lowering interest costs, extending maturities and increasing liquidity.

Separately, the U.S. Bankruptcy Court for the Southern District of New York approved key elements of Vertis’ previously announced exit financing agreements with Morgan Stanley Senior Funding, Inc. and GE Capital Restructuring Finance. It also approved key terms of Vertis’ $100 million new common equity injection, as specified in the Private Placement and the associated backstop agreements. Once completed, these financing arrangements will provide Vertis with the financial flexibility to further advance its products and services and strengthen its leadership position within the marketing communications industry.

“Building upon the significant progress we have made over the past two weeks, these recent milestones reaffirm that we are nearing the successful completion of our recapitalization and will emerge as a stronger company well positioned for continued investment and growth,” said Gerald Sokol Jr., chief financial officer. “This would not have been possible without the support of our note holders – including Avenue Capital, our current largest shareholder, and Alden Global Capital, which will be our largest shareholder after the recapitalization – as well as our lenders, clients, employees and especially our suppliers. Thanks to the team that has worked so diligently, we are able to complete our recapitalization quickly, from a strong cash position and with an unwavering focus on our clients and business partners.”

Perella Weinberg Partners and FTI Consulting, Inc. serve as the Company’s financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP is the Company’s legal counsel.


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