LodgeNet Interactive Corporation has announced it has entered into a definitive agreement with a syndicate formed by an affiliate of Colony Capital, a global investment firm with $38 billion in assets under management.
Under the terms of the deal the Colony Syndicate will provide $60 million of new capital to support a proposed recapitalisation of LodgeNet.
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 LodgeNet.
The plan of reorganisation envisions that unsecured creditors of LodgeNet will be paid in full for any pre-petition claims at the conclusion of the Chapter 11 process.
“As one of the largest investors in hospitality and media enterprises around the globe, and with a strong track-record of success, Colony Capital brings an unmatched combination of strategic acumen and financial resources to LodgeNet and its industry-leading footprint of 1.5 million hotel rooms,” said LodgeNet Interactive chairman Doug Bradbury.
“Under Colony’s leadership, LodgeNet is poised to transform its business through renewed financial strength, the introduction of new and innovative products and services, and strengthened industry relationships, thus re-affirming its position as the leading provider of interactive services to the hospitality and healthcare industries.”