Second restructuring of debt for Yellow Pages

Yellow pages directory. Photo:Ross Setford.

Yellow Pages Group is moving into a second restructuring of debt in four years but still faces a challenge balancing the slide of its print publications against attempts to expand the online directory business amid increased competition.

Yellow Pages chief executive Michael Boersen has unveiled the second major restructuring of debt for the company in four years.

Creditors have approved a waiving of $385 million of debt, which falls due in August and which Yellow Pages acknowledged it could not pay.

Twelve creditors have accepted securities in place of the debt they are owed. The latest restructuring has been in negotiation since February and it is being promoted as easing the way for the company to be more supple at improving revenue and profits.

The company's print directories have been under pressure while its online directories face competition such as from The Localist. Yellow Pages is a major partner with Google, but the search advertising giant is also a competitor.

Boersen said that the slide for print was not recognised at the time of the first restructuring, which was undertaken because of excessive debt incorporated into the purchase of the business in the mid-2000s.

He played a key role in the 2011 restructuring deal.

Asked whether the 2011 restructuring had not fully addressed the problems facing the company, necessitating the latest arrangement, Boersen said it was right for the time and within the agreement that could be reached between 42 parties.

He said the 2015 negotiations had been much simpler because there were 12 creditors rather than 42 and because they were comfortable with it being handled by the company rather than through banks.

Boersen said that the nature of the fall in revenue for print directories had not been foreseen in 2011 and there were still challenges ahead in expanding the digital arm while print provided substantial revenue.