Source Interlink Companies, Inc., which publishes multiple action sports magazines and web sites, including Surfing, Surfer, Skateboarder and Snowboarder, has filed for Chapter 11 bankruptcy as part of a recent restructured agreement with its lenders to eliminate $1 billion dollars of existing debt and privatize the company.
Source Interlink Chairman and CEO Greg Mays said, “We couldn't be more pleased, this restructuring will materially reduce our interest expense and debt levels, substantially improve free cash flow and allow us to capitalize on several operational opportunities to further improve and grow our business.”
“Current management will remain in place, daily operations will continue as usual… Importantly, all of our vendors will be paid in full for both pre-petition and on going charges according to our terms of trade. It's business as usual at Source Interlink,” Mays added.
Source's business partners support the restructuring as well. Bob Castardi, President of Curtis Circulation Company said, “The Curtis Circulation Company is very encouraged about being a valued trading partner, Source Interlink Companies' reorganization will reduce any concerns gong forward as to their financial stability. We at Curtis embrace the fact Source got out in front of this!”
Michael Sullivan, CEO of CMG, a national distributor of Source stated, “When Source presented their reorganization plan in detail we were very relieved to understand the huge debt write off. This will allow CMG to move forward with new initiatives knowing that Source Interlink Companies will be in a very favorable financial position.”
As a result of this agreement, Source Interlink has cancelled its investor call previously scheduled for May 1, 2009.
