Motivated Vertis Fast Tracks Recapitalization

BALTIMORE—Vertis Holdings 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 Dec. 1, including authorization to move forward with its 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 percent 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 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.