Struggling Cengage May File For Bankruptcy


Struggling Cengage May File For Bankruptcy

May 12, 2013

DIS(C)ENGAGE: Bloomberg reports that educational publishing giant, Cengage Learning, is due for some serious restructuring--which may include filing for bankruptcy. The Wall Street Journal has also reported that the college textbook company, which carries more than $5 billion in debt, reportedly saw its profits plunge by 90% for the quarter ending in last September. The next quarter improved, writes the WSJ, but revenue (compared to the previous year) was still down 11% to $407 million.

Cengage appeared headed in this direction back in February when executives met with restructuring advisers on dealing with its staggering debt. (Debt payments come due June 30 and July 5.) One such advice involved Cengage's owner, Apax Partners LLP, purchasing over $800 million of its debt in April.

It's worth noting that Apollo Global Management LLC, which purchased McGraw-Hill Education in November 2012, has also bought Cengage debt. The Wall Street Journal say a merger between Cengage and McGraw-Hill is not out of the question, though such a deal could potentially bring up antitrust issues.

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