is continuing to operate “without interruption” and employs are going to be paid “as normal” now that the company has received initial bankruptcy protection from a federal court in Delaware.
In a statement Tuesday morning, the Cary-based company that is one of the nation’s largest yellow pages and online search publishers said the U.S. Bankruptcy Court also allowed access to its $300 million in available cash.
Heavily burdened by debt and fighting for advertising in a slowing economy, Donnelley filed for bankruptcy protection May 28.
"The relief granted yesterday ensures R.H. Donnelley can continue business as usual as we take steps to restructure the company’s balance sheet and place R.H. Donnelley on a more solid financial foundation," said David C. Swanson, chairman and chief executive officer at Donnelley. "All of our customers will continue to receive the premier products and service they deserve, and our suppliers will continue to have a strong business partner."
Donnelley is seeking to reorganize under bankruptcy and says it has reached an agreement with “key creditors” to reduce debt by more than $6 billion while cutting interest payments by $500 million a year.
Mounting losses and mountains of debt have turned its stock (OVTC: RHDC) into one worth pennies. In its court filing, Donnelley listed assets of $11.9 billion and debts of $12.4 billion. Its 52-week high is $5.67.
In a statement issued last Friday, Donnelley said the bankruptcy would enable it to “consummate a balance sheet restructuring.”
Among Donnelley’s largest creditors are Bank of New York Mellon and U.S. Bancorp.
Donnelley recently missed a debt payment of $55 million and sought forbearance from its creditors until May 29.
Earlier in May, Donnelley reported a first-quarter net loss of $401 million with revenues declining 11 percent.
