'Golden Pages' holding firm files for US bankruptcy

TRUVO USA, the holding company for the Golden Pages and Truvo.ie directory site in Ireland, has filed for US bankruptcy protection with a plan to turn the company over to senior lenders, including AIB, according to court documents. The company publishes and distributes the Eircom phone book under contract.

The recent recession accelerated a shift among advertisers away from Truvo’s printed yellow- and-white-pages directories in Belgium, Ireland and Portugal to the internet, it said yesterday.

Truvo USA filed for bankruptcy with a proposal that would transfer ownership of the reorganised company to holders of its €777.6 million ($964.2 million) of senior loans.

The company is currently owned by funds associated with Apax Partners and Cinven. The private equity funds acquired the former VNU World Directories in 2005 for about €2 billion.

The company said its assets were worth about €1 billion and it estimated its liabilities at about €1.7 billion.

Truvo’s operating companies did not file for bankruptcy.

Putting the holding company Truvo USA LLC in bankruptcy in the United States, even though it has no operations there, allows Truvo to quickly restructure its debt.

The company staked out potential battle lines in its initial filings.

It asked Judge Arthur Gonzalez to prevent creditors from taking legal action against the company’s European operations, naming dozens of financial institutions in the request, including units of Goldman Sachs Group Inc, Deutsche Bank and Barclays.

“Over the past three years, the Truvo Group has experienced declines in print usage of up to 25 per cent per annum in key markets,” the company said.

Like other directories companies such as Dex One Corporation (formerly RH Donnelly Corporation), Truvo’s growing online business has failed to offset the rapid decline in its print business.

The company said it had retrained its 1,700 staff for internet advertising and had launched new products to help advertisers reach online consumers. However, it said it realised it could not generate enough cash and needed to restructure its debt.

In addition to the equity, the senior lenders would get €350 million of new senior debt and €100 million of junior debt.

Lenders would have the option of accepting additional debt in lieu of stock.

Holders of at least 70 per cent of the company’s loans have agreed to the reorganisation, according to court documents.

The company said it has been negotiating with noteholders since March, but its plan had the support of only three investors who held 15 per cent of its notes. All three are affiliated with Elliott Management Corporation.

The company added that it had all the support of creditors it needed to confirm the plan, while the support of noteholders was not required because it was not “in the money”.