Getty Images Holdings Inc. will receive an equity injection from existing shareholders as part of a prepackaged bankruptcy to restructure and take private the photo archive and stock-image company.
Members of the Getty family and Koch Equity Development, the investment arm of Koch Inc., will provide up to US$433 million of new equity as part of the agreement, the company said in its restructuring support agreement disclosed on Monday.
Under the agreement, the equity investors, comprising Getty family entities and Koch Equity Development affiliates, would own 100 per cent of the reorganised company upon emergence from bankruptcy.
Noteholders representing 83.5 per cent of Getty's unsecured bonds have agreed to retire US$270 million in outstanding senior unsecured notes, while holders representing approximately 89 per cent of the company's secured bonds and term loans, and 100 per cent of revolving credit facility lenders, have agreed to reduce interest obligations and extend debt maturities.
Getty Images said it intends to seek creditor approval of its reorganisation plan within days, after which the formal Chapter 11 filing would follow in the weeks ahead. The restructuring is expected to be completed by the end of the year. Koch Equity Development will provide up to US$143 million in financing to fund the process. The filing will be limited to certain US entities.
The company said day-to-day operations would not be disrupted by the proceedings, with vendors receiving full payment as usual and no adverse effects anticipated for employees, contributors, customers or partners.
"This transformational transaction is underpinned by the strength of the business and the significant growth potential we see ahead," Getty Images co-founder and Chairman of the Board, Mr Mark Getty, said in a statement.
The Chief Executive Officer, Mr Craig Peters, said the deal reflects "the steadfast support of the Getty family, Koch Equity Development, and our lenders."
Mr Mike Harris, senior managing director and co-head at Koch Equity Development, said the investment "will provide Getty Images with a firm financial foundation and greater flexibility to continue investing in its employees, customers, contributors, and future growth." Koch Equity Development has been a backer of Getty Images since 2018.
Collapse of Shutterstock merger
The planned bankruptcy filing comes roughly three months after Getty Images voted to terminate its planned US$3.7 billion merger with Shutterstock after the United Kingdom's Competition and Markets Authority conditioned its approval on a sale of Shutterstock's editorial business. Getty's board declined to accept that condition. Following the collapse of the merger, Getty hired Guggenheim Securities to evaluate strategic financing alternatives.
An investor presentation released Monday by Getty Images showed that its iStock eCommerce unit has been contending with softening demand, even as the company expects its editorial image division to keep expanding.
Debt and market value
The company reported total debt of about US$2.1 billion as of June 30, compared with a market valuation of US$20.74 million as of Friday's close. Getty shares have lost about 99 per cent of their value since returning to public markets in 2022 through a special purpose acquisition company that valued the company at about US$4.8 billion, after 14 years as a private firm. The New York Stock Exchange commenced delisting proceedings against the company at the end of September.
