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SIOUX FALLS, S.D.,
Dec. 31, 2012 /PRNewswire/ -- LodgeNet Interactive Corporation (Nasdaq: LNET) ("LodgeNet" or the "Company") today announced that it has entered into a definitive agreement with a syndicate formed by an affiliate of Colony Capital (herein "Colony Syndicate"), a global investment firm with
$38 billion in assets under management and a broad range of hospitality and media industry investments, pursuant to which the Colony Syndicate will provide
$60 million of new capital to support a proposed recapitalization of the Company. 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 the Company. The plan of reorganization envisions that unsecured creditors of LodgeNet will be paid in full for any pre-petition claims at the conclusion of the Chapter 11 process.
Colony has also executed a memorandum of understanding with DIRECTV, LLC., setting forth certain terms pursuant to which LodgeNet and DIRECTV intend to operate as strategic partners within the hospitality and healthcare markets. As part of the expanded partnership between the two companies, DIRECTV will provide its world-class operational, technological and marketing capabilities to help deliver new and improved LodgeNet services to the industry.
Importantly, throughout this process, LodgeNet's current hospitality and healthcare customers will continue to receive LodgeNet's entertainment and connectivity services, as well as ongoing maintenance and support, without interruption.
Under the terms of these agreements, the Colony Syndicate will receive new common stock representing 100 percent ownership of LodgeNet. The Colony Syndicate's investment and the new credit agreement provide added financial flexibility, while Colony Capital's industry experience and DIRECTV's new contributions will ensure LodgeNet's continued market leadership as it works with customers to offer the best in-room entertainment and connectivity services available today.