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QVC Debt Swap Signals New Ownership on Horizon
18 Apr
Summary
- Major investment firms acquired substantial QVC bank debt.
- Debt will be swapped for equity in QVC's Chapter 11 restructuring.
- Company anticipates exiting bankruptcy in approximately 90 days.
Major investment firms, including Silver Point Capital and Strategic Value Partners, have recently purchased substantial amounts of QVC Inc.'s bank debt. This acquisition is a precursor to a significant ownership shift in the television shopping network as it undergoes Chapter 11 restructuring.
The acquired debt, amounting to $2.9 billion in QVC's revolving credit facility and a share of $2.1 billion in QVC notes, will be exchanged for equity. This strategic move is supported by lenders holding the majority of QVC's debt. Other firms like Goldentree Asset Management LP and Oaktree Capital Management LP also hold significant portions of QVC's notes.
QVC anticipates finalizing its restructuring and exiting Chapter 11 proceedings within approximately 90 days. This process will reduce the company's total debt from $6.6 billion to $1.3 billion. While this restructuring will eliminate existing shareholders, a lawyer for some preferred shareholders indicated potential challenges to the proposed terms.
During a recent court hearing, QVC's request to continue normal operations throughout the bankruptcy process was approved. The case is being handled in the US Bankruptcy Court for the Southern District of Texas.
