Advanced Marketing Services Files Voluntary Petition under Chapter 11 of United States Bankruptcy Code
Company Will Use $75 Million Loan Agreement to Fund Ongoing Operations; Customer and Publisher Service Will Not Be Impacted by the Filing
Copyright by Business Wire
SAN DIEGO--(BUSINESS WIRE)--Advanced Marketing Services, Inc. (the Company) (Pink Sheets: MKTS), a leading provider of customized merchandising, wholesaling and contract distribution services, announced today that it has filed a voluntary petition under Chapter 11 of the Federal Bankruptcy Code in United States Bankruptcy Court for the District of Delaware. The Chapter 11 proceeding does not include the Company’s international subsidiaries in the United Kingdom, Mexico and Australia, and their operations will not be affected.
The Company also announced that, in conjunction with the filing, it has entered into a loan agreement for $75 million in Debtor-in-Possession (DIP) financing from Wells Fargo Foothill, Inc., subject to court approval. The DIP financing should provide sufficient liquidity to meet the Company’s ongoing operating needs during the proceeding.
During the past few months, the Company explored a number of alternatives to strengthen the Company’s financial base and resolve past legal and regulatory issues. Despite making some progress, the Company was unable to secure new financing and the current loan facility, which is used to finance the Company’s operations, will not be extended beyond December 28, 2006.
“This move will permit AMS, with its investment banker, to continue to pursue strategic alternatives,” said Gary M. Rautenstrauch, President and Chief Executive Officer. “Additionally, Chapter 11 protection will enable the Company to continue to conduct business in the normal course, make payments to vendors going forward and continue delivering quality service and products to customers.”
About Advanced Marketing Services, Inc.
Headquartered in San Diego, California, the Company is a leading provider of customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The Company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people worldwide. The Company provides a wide range of value-added services that provide its retailer customers with book buying advice, promotional support and expert supply chain management, to ensure the success of their book programs. The Company's proprietary Vendor Managed Inventory (VMI) software is a unique tool that allows its book specialists to manage efficiently and effectively the book distribution supply chain for the benefit of its membership warehouse club customers. Publishers Group Worldwide (PGW), an alliance of the Company's global contract distribution operations, provides independent publishers with exclusive full service English language sales and distribution services.
Forward-looking statements in this public announcement are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements that involve risks and uncertainties, including the following statements:
The DIP financing should provide sufficient liquidity to meet the Company’s ongoing operating needs during the proceeding; and
Chapter 11 protection will enable the Company to continue to conduct business in the normal course, make payments to vendors going forward and continue to deliver quality service and products to customers.
Certain important factors could cause results to differ materially from those anticipated by the forward-looking statements, including the following: The DIP financing is subject to certain terms and conditions. The Company’s failure to comply with those terms and conditions could result in a default under the DIP financing loan agreement and, consequently, insufficient liquidity to meet the Company’s ongoing operating needs during the proceeding.
Contacts
MWW Group
Media and Stockholders:
Rich Tauberman, 201-507-9500
rtauberman@mww.com
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