SYS-CON MEDIA Authors: Ian Khan, Liz McMillan, AppDynamics Blog, Harry Trott, Blue Box Blog

News Feed Item

Education Management Reaches Agreement In Principle With Creditors On Debt Restructuring

- Proposed Restructuring Supported by Lenders and Bondholders Holding in Excess of 80% of Debt

PITTSBURGH, Aug. 27, 2014 /PRNewswire/ -- Education Management Corporation (NASDAQ: EDMC), one of the largest providers of post-secondary education in North America, today announced it has reached agreement in principle regarding a financial restructuring with holders of more than 80 percent of its secured and unsecured financial indebtedness.  The company's Board of Directors has approved the restructuring.  

"We believe this plan, which will convert a significant portion of our debt into equity and result in a vastly improved capital structure with lower interest expense and extended maturities, is in the best interests of all stakeholders, most importantly our students," said Edward H. West, Education Management president and CEO. "This new capital structure is critical to the future success of EDMC and part of our plan to transform the company."

The proposed restructuring will reduce the company's funded debt by approximately $1.1 billion, providing for the exchange of approximately $1.5 billion of outstanding debt as of June 30, 2014 for $400 million of new debt, preferred equity interests that would be convertible into common shares and warrants for the purchase of common shares.  The company's existing shareholders would retain 4 percent of the outstanding common stock after giving effect to the conversion of the new preferred stock and receive warrants to purchase an additional 5 percent of the common stock.  The comprehensive, multi-step restructuring remains subject to applicable regulatory approvals and a shareholder vote, which the company expects to complete in 2015.

Pending consummation of the restructuring, the company will enter into an amendment to its senior credit facility to waive all financial covenants through June 30, 2015, substantially decrease cash interest expense and require no principal amortization payments through June 30, 2015, and extend the maturity of the revolving credit facility through July 2, 2015. 

The restructuring plan has the support of more than 80 percent of the company's revolving lenders, term loan lenders and bondholders.  The company is seeking support for its restructuring plan from the remaining lenders and bondholders. However, no assurance can be given as to the level of additional support for the restructuring the company ultimately will be able to obtain.  Additional details may be found in the company's filing on Form 8-K dated Aug. 27, 2014.

About Education Management Corporation
Education Management Corporation (www.edmc.edu), with approximately 119,500 students as of April 2014, is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 110 locations in 32 U.S. states and Canada.  The company offers academic programs to students through campus-based and online instruction, or through a combination of both.  The company is committed to offering quality academic programs and strives to improve the learning experience for its students.  Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including media arts, health sciences, design, psychology and behavioral sciences, culinary, business, fashion, legal, education and information technology.

Cautionary Statement
This press release includes information that could constitute forward-looking statements with the meaning of the Private Securities Litigation Reform Act of 1995.  These statements, which are based on information currently available to management, concern the company's strategy, plans, intentions or expectations and typically contain words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "will," "should," "seeks," "approximately," "plans," "projects," or similar words, although the absence of such words does not mean that any particular statement is not forward-looking.  Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors including, without limitation, the possibility that the company will fail to consummate the restructuring plan due to the failure to obtain regulatory or shareholder approval or otherwise,  and the factors set forth in our filings with the Securities and Exchange Commission including, without limitation, our annual report on Form 10-K for the fiscal year ended June 30, 2013 and our Form 10-Q for the quarter ended March 31, 2014, under the caption "Risk Factors." In connection with the restructuring transaction, the company may deregister the common stock with the Securities and Exchange Commission and delist it from trading on Nasdaq. Any forward-looking statements contained in this release speak only as of the date of such release, and we caution existing and prospective investors not to place undue reliance on such statements. Such forward-looking statements do not purport to be predictions of future events or circumstances, and therefore, there can be no assurance that any forward-looking statement contained our releases will prove to be accurate. The company undertakes no obligation to update or revise any forward-looking statements.

SOURCE Education Management Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that CenturyLink, Inc., a leader in the network services market, has been named “Platinum Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. CenturyLink is the third largest telecommunications company in the United States and is recognized as a leader in the network services market by technology industry analyst firms. The company is a global leader in cloud infrastructure and ...
Database apps on mobile devices shouldn't stop working when there's limited or no network connectivity. In his session at 16th Cloud Expo, Bradley Holt, a Developer Advocate for IBM Cloudant, will discuss how to bring data stored in a cloud database to the edge of the network (and back again), whenever an Internet connection is available. He will demonstrate techniques for replicating cloud databases with mobile devices in order to build offline-enabled mobile apps that can provide a better,...
In his session at 16th Cloud Expo, Simone Brunozzi, VP and Chief Technologist of Cloud Services at VMware, will review the changes that the cloud computing industry has gone through over the last five years and share insights into what the next five will bring. He will chronicle the challenges enterprise companies are facing as they move to the public cloud. He will delve into the “Hybrid Cloud” space and explain why every CIO should consider ‘hybrid cloud’ as part of their future strategy to a...
While Docker continues to be the darling of startups, enterprises and IT innovators around the world, networking continues to be a real mess. Indeed, managing the interaction between Docker containers and networks has always been fraught with complications. Without automation in networking, the vision of running Docker at scale and letting IT run the same apps unchanged on the laptop and in the data center or for any cloud cannot be realized.
"Blue Box has been around for 10-11 years, and last year we launched Blue Box Cloud. We like the term 'Private Cloud as a Service' because we think that embodies what we are launching as a product - it's a managed hosted private cloud," explained Giles Frith, Vice President of Customer Operations at Blue Box, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Puppet Labs on Wednesday released the DevOps Salary Report, based on salary data gathered from Puppet Labs' industry-recognized State of DevOps Report. The data confirms that market demand for DevOps skills is growing, and that DevOps engineers are among the highest paid IT practitioners today. That's because IT organizations today are grappling with how to be more agile and responsive to the business, while maintaining the stability of their infrastructure. DevOps practices, such as continuous ...
"SOASTA built the concept of cloud testing in 2008. It's grown from rather meager beginnings to where now we are provisioning hundreds of thousands of servers on a daily basis on behalf of customers around the world to test their applications," explained Tom Lounibos, CEO of SOASTA, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Docker is becoming very popular--we are seeing every major private and public cloud vendor racing to adopt it. It promises portability and interoperability, and is quickly becoming the currency of the Cloud. In his session at DevOps Summit, Bart Copeland, CEO of ActiveState, discussed why Docker is so important to the future of the cloud, but will also take a step back and show that Docker is actually only one piece of the puzzle. Copeland will outline the bigger picture of where Docker fits a...
“This win means a great deal to us because it is decided by the readers – the people who understand how use of our technology enables new insights that drive the business,” said Matt Davies, senior director, EMEA marketing, Splunk. “Splunk Enterprise enables organizations to improve service levels, reduce operations costs, mitigate security risks, enhance DevOps collaboration, create new product and service offerings and obtain deeper insight into customer behavior. Being named Best Business App...
In a world of ever-accelerating business cycles and fast-changing client expectations, the cloud increasingly serves as a growth engine and a path to new business models. Dynamic clouds enable businesses to continuously reinvent themselves, adapting their business processes, their service and software delivery and their operations to achieve speed-to-market and quick response to customer feedback. As the cloud evolves, the industry has multiple competing cloud technologies, offering on-premises ...
SYS-CON Events announced today the DevOps Foundation Certification Course, being held June ?, 2015, in conjunction with DevOps Summit and 16th Cloud Expo at the Javits Center in New York City, NY. This sixteen (16) hour course provides an introduction to DevOps – the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will res...
Avnet, Inc. has announced that it ranked No. 4 on the InformationWeek Elite 100 – a list of the top business technology innovators in the U.S. Avnet was recognized for the development of an innovative cloud-based training system that serves as the foundation for Avnet Academy – the company’s education and training organization focused on technical training around top IT vendor technologies. The development of this system allowed Avnet to quickly expand its IT-related training capabilities around...
In his session at DevOps Summit, Andrei Yurkevich, CTO at Altoros, provided an overview of all the benefits and opportunities, as well as drawbacks of deploying Cloud Foundry PaaS with Juju and compared it to BOSH. Discover the features that overlap, and understand what Juju Charm is, what it is not, where you use one or the other or where you use both BOSH and Juju Charms together. Andrei Yurkevich is Cloud Foundry protagonist and CTO at Altoros. Under his supervision, the Altoros engineering ...
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises a...
The Internet of Things Maturity Model (IoTMM) is a qualitative method to gauge the growth and increasing impact of IoT capabilities in an IT environment from both a business and technology perspective. In his session at @ThingsExpo, Tony Shan will first scan the IoT landscape and investigate the major challenges and barriers. The key areas of consideration are identified to get started with IoT journey. He will then pinpoint the need of a tool for effective IoT adoption and implementation, whic...