Getty Images Holdings says it borrowed $85 million on October 23 under bankruptcy financing intended to fund its Chapter 11 process and support continued ordinary-course operations. The company disclosed the borrowing in a Form 8-K filed with the Securities and Exchange Commission on October 26.
The filing also warns that existing shareholders would receive no recovery on their shares if its reorganization plan is confirmed. It does not report that the plan has already taken effect.
What Getty disclosed
According to the filing, Getty and specified subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware on October 21. They seek to implement a prepackaged reorganization plan under a previously disclosed restructuring support agreement.
Getty says the court approved its debtor-in-possession financing on an interim basis on October 23. That day, it entered a credit agreement with lenders and Cantor Fitzgerald Securities as administrative and collateral agent.
Debtor-in-possession financing is borrowing by the company during the bankruptcy process. Getty says the financing, together with cash generated from ongoing operations, is intended to support the process and its business. That is the company's stated intention, rather than a guarantee of continued operations or the restructuring's outcome.
The financing is not all drawn
The facility provides up to $143 million in principal. It consists of $85 million in interim term loans, $28 million in final term loans and $30 million in delayed-draw commitments.
Getty reports $85 million outstanding on October 23. The additional $28 million requires satisfaction of conditions including a final court approval order. The delayed-draw commitments are also conditional. The facility's maximum size therefore is not the amount already borrowed.
What the shareholder warning says
Under the proposed plan, existing common stock and other existing equity interests would be cancelled, discharged and extinguished on the plan's effective date. Holders, including majority shareholders, would receive no distribution, recovery or property on account of those interests if the plan is confirmed.
Getty describes trading during the bankruptcy cases as highly speculative and says prices may bear little or no relationship to any recovery. The filing identifies final financing approval and plan approval among the uncertainties; neither the financing agreement nor this disclosure establishes that the company has completed its reorganization.