The YLO recapitalization announced in July and amended September 4, has been approved:
Yellow Media (TSX: YLO) announced today that its proposed recapitalization has been approved by the requisite majority of its debtholders and shareholders at their respective meetings, both of which were held earlier today in Montréal.
“We are pleased with the results of the vote” said Marc P. Tellier, Yellow Media’s President and Chief Executive Officer. “The approval by the debtholders and shareholders represents a significant milestone towards the completion of the recapitalization.”
The Company proposed the recapitalization to align its capital structure with its operating strategy. The recapitalization will substantially improve the financial flexibility of the Company and allow the Company to pursue its ongoing transformation in order to enhance long-term value for stakeholders.
The implementation of the recapitalization is expected to occur by the end of September 2012 subject to a number of conditions, including the receipt of the final approval by the Québec Superior Court, and to other risks and uncertainties.
The preferred shares, YLO.PR.A, YLO.PR.B, YLO.PR.C and YLO.PR.D, immediately jumped from about $0.50 to the $0.70-0.80 range.
As preferred shareholders will get 6.25 new common per 100 preferreds (as well as some warrants) this indicates that new common is being priced at about $12/share.
As about 28-million new common shares will be issued (and some warrants) this indicates market capitalization of about $335-million on the restructured company, on top of about $850-million in debt. As noted on April 9 the Cerberus / AT&T transaction indicated an enterprise value of about $1-billion for YLO, which some people (according to Boyd Erman) thought could stretch to the 1.4-billion to 2.2-billion range.
The common shares are now trading at 0.085-0.09; the recapitalization’s conversion ratios indicate that one preferred share should be worth about 12.5 old common shares.
Update, 2012-9-10: YLO provides reorganization timing:
Yellow Media Inc. (TSX: YLO) announced today that, following the approval of the recapitalization by the requisite majority of the Company’s debtholders and shareholders at their respective meetings held on September 6, 2012, the hearing for the final approval of the recapitalization by the Québec Superior Court has been set by the Court to begin on October 15, 2012.
The implementation of the recapitalization is currently expected to occur on or about October 31, 2012, subject to a number of conditions, including the receipt of the Court’s final approval as set forth above, and to other risks and uncertainties.
[…] has four series of preferred shares outstanding, YLO.PR.A, YLO.PR.B, YLO.PR.C and YLO.PR.D. The recapitalization plan has won shareholder and creditor approval and, if approved by the Quebec Superior Court, will more-or-less wipe out common and preferred […]