LodgeNet Interactive
Corporation LNET today announced that
it has entered into a definitive agreement with a syndicate formed by an
affiliate of Colony Capital (herein "Colony Syndicate"), a global investment
firm with $38 billion in assets under management and a broad range of
hospitality and media industry investments, pursuant to which the Colony
Syndicate will provide $60 million of new capital to support a proposed
recapitalization of the Company. In addition, the Company has received
support from a steering committee of its lenders holding its debt for a
multi-year extension of its existing $346 million secured credit facility.
The transaction will be implemented through an expedited Chapter 11 bankruptcy
process, at the conclusion of which the Colony Syndicate would become the
controlling stockholder of the Company. The plan of reorganization envisions
that unsecured creditors of LodgeNet will be paid in full for any pre-petition
claims at the conclusion of the Chapter 11 process.
Colony has also executed a memorandum of understanding with DIRECTV, LLC.,
setting forth certain terms pursuant to which LodgeNet and DIRECTV intend to
operate as strategic partners within the hospitality and healthcare markets.
As part of the expanded partnership between the two companies, DIRECTV will
provide its world-class operational, technological and marketing capabilities
to help deliver new and improved LodgeNet services to the industry.
Importantly, throughout this process, LodgeNet's current hospitality and
healthcare customers will continue to receive LodgeNet's entertainment and
connectivity services, as well as ongoing maintenance and support, without
interruption.
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