KIT digital has announced that it expects to file for Chapter 11 bankruptcy and reorganise under a new group entity named Piksel by April 24.
This follows an agreement between its largest shareholders – Prescott Group Capital Management, JEC Capital Partners and Ratio Capital Partners – and is the final phase of a restructuring that will include recapitalization and regrouping of Ioko 365, Polymedia, Kewego, Multicast and Megahertz into the new group entity.
The company rapidly expanded through a series of acquisitions, including UK-based Megahertz Broadcast Systems, a $2.7m deal concluded at IBC 2010, and in April 2011 cloud based video provider ioko365 for US$79.4 million, however financial pressures forced the company to restructure and last December KIT delisted from NASDAQ.
According to KIT digital, only the parent company, and not its profitable subsidiaries, will be involved in the Chapter 11 filing.
Commenting on the action, William V. Russell, non-executive chairman of the board of directors, said: “We are pleased to announce this comprehensive solution that will provide KIT with relief from the financial, legal, and regulatory issues currently encumbering it. The Plan allows all shareholders the opportunity to participate in the future growth of the Company and at the same time it will complete the Company’s restructuring by strengthening the balance sheet and positioning it for profitable growth.”
Peter Heiland, interim CEO and Plan Sponsor group member, added: “The Plan provides certainty and comfort to our customers and employees and it will allow the reorganised company to aggressively pursue growth opportunities with confidence.
“By moving the core businesses forward together unburdened by the issues currently plaguing the corporate parent, our customers and products can once again become the sole focus of this exciting business.”
KIT digital provides video management software and services company and includes such leading brands as Airbus, The Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google, HP, MTV, News Corp, Sky Deutschland, Sky Italia, Telecom Argentina, Telecom Italia, Telefonica, Universal Studios, Verizon, Vodafone VRT and Volkswagen among its clients.