Getty Images Holdings, the photo, video and music licensing group behind Getty Images, iStock and Unsplash, began a prepackaged Chapter 11 case in Delaware today. Its press release labels the shares OTCPK: GETY, and the company’s risk factors flag delisting from the NYSE. Those risk factors also say holders of Class A common stock, the publicly traded shares, would not receive or retain any property under the plan.
The shares closed yesterday at $0.02, up from $0.0135 on Monday, but still about 97% below the $0.629 close of the 15th of July.
The company said the filing, made before markets opened, implements a Restructuring Support Agreement, a signed deal backing the plan, dated the 12th of October. Prepackaged means creditor votes are pre-agreed, and a solicitation process has been launched. Lenders across the capital structure support the deal.
The plan brings up to $533M of new equity from affiliates of the Getty family and Koch Equity Development, the investment arm of the privately held US group Koch, Inc. It also provides a significant debt reduction. The company would emerge privately held by those investors, with completion expected by the end of the year, subject to regulatory approvals.
The shares had priced much of this in. The steepest falls came in late September and on the 12th of October, when they dropped about 60% from $0.0479 to $0.0189 on 12.3M shares traded. Seeking Alpha reported that Getty missed interest payments due on the 1st of September on its unsecured notes and entered a 30-day grace period; the company has not confirmed this in its release.
Chief executive Craig Peters said:
Today’s filing is a procedural step to implement the financial restructuring previously announced.
Craig Peters, Chief Executive Officer, Getty Images
The company expects no impact on employees, contributors, customers or vendors, and said it has filed motions to pay vendors and employees in the ordinary course.
The risks for shareholders go beyond the equity terms. The risk factors flag limited trading on the over-the-counter pink market, doubt over the company’s ability to continue as a going concern, warrant litigation and a possible loss of the right to use the Getty Images trademarks.