Skillsoft announces confirmation of pre-packaged reorganization plan

By Caroline Salls

Pittsburgh, Aug. 6 – Skillsoft Corp.’s pre-packaged plan of reorganization was confirmed on Thursday by the U.S. Bankruptcy Court for the District of Delaware, according to a company news release.

As previously reported, Skillsoft filed bankruptcy to implement a restructuring support agreement reached with a majority of its first-lien and second-lien lenders.

Under the pre-packaged plan based on the restructuring support agreement, holders of the company’s first-lien debt will receive their share of $410 million in takeback first-lien debt and 96% of the equity in the reorganized company.

Holders of second-lien debt will receive their share of 4% of the equity, as well as warrants to purchase up to 15% of equity in the reorganized company at various price thresholds based on first-lien debtholders achieving specified recovery levels.

Holders of general unsecured claims will be paid in full in the ordinary course of business.

Holders of existing parent equity interests will receive no distribution. Other existing interests will be cancelled.

Skillsoft said it expects to successfully complete its financial restructuring process and emerge from Chapter 11 in the coming weeks with a right-sized capital structure, stronger balance sheet and significant additional liquidity.

Upon emergence, the company said it will reduce its total debt by $1.5 billion, eliminating roughly $100 million in annual interest payments and have about $50 million in liquidity.

This comprehensive de-leveraging includes reducing first-lien and second-lien debt to $410 million from $2 billion, with $525 million in total net debt, the release said.

Skillsoft said its financial restructuring and new financing will enable it to continue its focus on investing in new products, solutions and content to drive value for its customers and growth in the business.

“We look forward to emerging as a stronger organization with a right-sized capital structure and significant financial flexibility, making us well-positioned to continue providing best-in-class digital learning and talent management solutions to thousands of customers around the world,” chief administrative officer John Frederick said in the release.

“We remain focused on supporting our customers and their learners as they adapt at an unprecedented pace to changing workplace and employment needs in response to the growing skills gap and in the face of a global pandemic.”

Weil, Gotshal & Manges LLP is serving as legal counsel to Skillsoft, Houlihan Lokey Capital, Inc. is serving as investment banker and AlixPartners LLP is serving as financial adviser.

Skillsoft is a Boston-based provider of cloud-based learning services. The company filed bankruptcy on June 14 under Chapter 11 case number 20-11532.

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