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Bike Mag Should Come Out Stronger

Published April 29, 2009

SAN JUAN CAPISTRANO, CA (BRAIN)—Bike Magazine has had to run lean over the last year, but it hopes that the recent pre-packaged bankruptcy reorganization will now better improve cash flow.

“We basically just refinanced our loan,” said Derek DeJonge, publisher of Bike Magazine. “Source Interlink’s [annual revenue] wasn’t even enough to pay the interest [on the debt]. The bottom line is it didn’t work. Citibank stepped up and we refinanced through them. Now we have a more manageable loan payment that we have to take care of.”

Source Interlink Companies, the publisher of 75 magazines including Bike, restructured its agreement with lenders eliminating approximately $1 billion dollars of existing debt and privatize the company. Source Interlink bought the local action sports and automotive publications of Primedia in 2007 for about $1.2 billion. Source Interlink has 7,300 employees.

Under the agreement, the company’s lenders will cancel nearly $1 billion of the company’s existing debt and provide approximately $100 million in additional liquidity. Source Interlink, in agreement with its lenders, will pay all of its vendors in full and on time if they agree to maintain current credit and payment terms. The company anticipates it will emerge within 35 days of its Plan of Reorganization under Chapter 11 in the U.S. Bankruptcy Code.

For more on how Bike Magazine is staying competitive against the competition, be sure to read the May 15 issue of Bicycle Retailer and Industry News.

—Jason Norman

Topics associated with this article: Media/Publishing

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