By: E&P Staff Vertis Communications said Wednesday its prepackaged reorganization plan has been confirmed by the U.S. Bankruptcy Court in Delaware, clearing the way for its merger with another big newspaper insert printer, American Color Graphics.
American Color's prepackaged reorganization plan was also confirmed in another order signed by Judge Christopher S. Sontchi, Vertis said.
Vertis will close the merger and emerge from its prepackaged Chapter 11 on the effective date of the plan, which is expected to occur in mid-September.
Under the plan, Vertis said, all trade creditors are being paid in full. The company said it has continued to pay vendors while maintaining ordinary business since filing its reorganization plan last July 15.
Vertis' reorganization plan includes a $250 million Senior Secured Revolving Credit exit facility from GE Commercial Finance and a $400 million exit facility from Morgan Stanley Senior Funding Inc., as lead arranger.
The reorganization merges American Color's operations into Vertis' nationwide marketing and printing services platform.
"The merger will allow both companies to enrich their core advertising inserts and newspaper products manufacturing capabilities," a Vertis statement said. "It will also enable both Vertis and American Color to offer an unprecedented scope of premedia and workflow solutions to customers."
The financial restructurings will reduce the combined company's debt obligations by approximately $1 billion before transaction fees and expenses, Vertis said.
Noteholders of Vertis and American Color will exchange their bonds for an aggregate of $550 million in new notes and substantially all of the new equity in the merged company.
American Color operates eight print locations across the continent; a TMC (total market coverage) facility; six regional premedia centers; and photography studios nationwide.
Vertis has more than 100 locations in the U.S., and is headquartered in Baltimore.
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