R.H. Donnelley loss widens; to evaluate capital structure
* Q4 loss wider on $744 mln write-downs
* May be unable to refinance debt
* Retains Lazard to evaluate capital structure
* $9.4 bln outstanding debt at end of 2008
Yellow-pages publisher R.H. Donnelley Corp (RHDC.PK) posted a wider quarterly net loss on the back of a $744 million write-down and hired Lazard to help the debt-laden company evaluate its capital structure.
Though we intended to refinance this debt prior to maturity, it may no longer be possible to do so given the current state of the capital markets, Chief Financial Officer Steven Blondy said in a statement, referring to its debt maturities in 2010.
The company plans to start talks with its bondholders and banks on amending, refinancing or restructuring its debt obligations, Blondy said.
R.H. Donnelley reduced its debt by $621 million last year and had $9.4 billion in net debt outstanding at the end of 2008.
Like its peers such as Idearc Inc (IDAR.PK), the credit crisis followed by the recession has taken a heavy toll on their core customers -- small- and medium-sized businesses -- leading to an unabated fall in advertising revenue for the yellow-page publishers.
R.H. Donnelley said it had tapped a credit line for $361 million last month and that it had significant liquidity to meet all of its financial and business obligations.
Early last month, Moody's Investors Service had warned that R.H. Donnelley and Idearc were likely to pursue a pre-packaged bankruptcy or distressed debt exchange as they struggled to overcome high debt loads.
R.H. Donnelley posted a fourth-quarter pre-tax loss of $700.3 million, compared with a loss of $27 million a year-ago. Net revenue fell 7 percent to $630 million, as advertising sales fell 12 percent.
The write-down was mostly the results of a slump in the company's stock value -- about 98 percent over the past year. The steep drop in the stock price led to a trade suspension on the New York Stock Exchange.
Shares of the company were trading down 4.17 percent at $0.115 in morning trade on Pink Sheets. (Reporting by Savio D'Souza in Bangalore; Editing by Anil D'Silva)
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