The publisher of the Yellow Pages directories has about $900 million in remaining debt after a recapitalization plan that it hopes will be part of its transformation to a digital media and marketing company.
Parent company Yellow Media Ltd. said Thursday it cut its debt by about $1.5 billion under the plan.
Total debt before the restructuring was more than $2 billion.
“It was a difficult year for all of our stakeholders, but this is a great outcome for the company,” president and CEO Marc Tellier said.
“It removes the uncertainty for advertisers, for employees. It allows us the flexibility to focus on our digital transformation,” Tellier said in an interview.
Yellow Media owns a number of publications including the Yellow Pages print directories, YellowPages.ca, Canada411.ca and RedFlagDeals.com.
Tellier said the company has about 320,000 customers, of which 61% advertise online.
Yellow Media also builds websites for small- and medium-sized businesses and provides such services as email marketing, search engine marketing, video production and mobile advertising.
Last winter, Yellow Media shook up its board and brought in experts in restructuring and corporate finance to help deal with its debt. The company also cancelled its shareholder dividend.
The recapitalization plan was recently approved by Quebec Superior Court after getting the go ahead from Yellow Media’s debtholders, shareholders and convertible debenture holders.
The restructuring saw the company’s various creditors exchange their debt for a combination of cash, new secured and unsecured debt as well as new shares and warrants in Yellow Media depending on their holdings.
Tellier said he expects it to take roughly 18 to 36 months to complete Yellow Media’s transformation.
“We’re not replacing the print declines fast enough with the new online revenues, but as online continues to be a bigger part of the business, we feel good about the strategy.”
The company – which printed its first directory in 1908 when it was still part of Bell Canada – has had to adapt to consumers find information about local businesses online and on mobile devices.
Tellier said on annualized basis about 34%, or $370 million, of Yellow Media’s revenues are digital.
The company recently announced it’s adding about 170 Montreal-based information and digital technology positions, but about 125 clerical positions will be moved to other company offices across Canada from Montreal.