Skillsoft enters restructuring agreement with lenders

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The agreement aims to help the organization reduce its debt from approximately $2 billion to $585 million.

by Elizabeth Loutfi-Hipchen

June 16, 2020

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Education and training software company Skillsoft Corp. has filed for chapter 11 bankruptcy in the Delaware courts, effectively entering a restructive support agreement with first and second lien lenders that would help reduce the organization’s $2 billion debt to $585 million and would also lower the organization’s annual cash interest by approximately $100 million.

As the restructuring agreement carries out, Skillsoft will continue to operate normally and without material disruption, according to a Business Wire press release, and will remain focused on providing its customers with corporate learning solutions, support resources and live events. The company has also announced that there are no planned changes to Skillsoft’s current leadership team or organizational structure as a result of the restructuring agreement.

This announcement marks an important step forward in significantly strengthening Skillsoft’s capital structure and positioning the company for long-term success, said John Frederick, Skillsoft’s chief administrative officer.

“This is an exciting time for digital learning, and Skillsoft provides best-in-class learning solutions to thousands of customers around the world, including 65 percent of companies in the Fortune 500. While our core business remains strong, with attractive profitability and cash flow characteristics, our debt levels are too high. We need to invest further and that requires our debt levels to come down to free up cash to further enhance our offerings,” he added.

Skillsoft is also expecting approximately $50 million in liquidity once the restructuring agreement is complete, with leverage at approximately 3.5 times net debt-to-Last Twelve Months EBITDA.

“We look forward to benefiting from a stronger balance sheet and enhanced financial flexibility as we continue investing in new products, solutions and content to drive value for our customers and growth in the business,” Frederick said.

Elizabeth Loutfi-Hipchen

Elizabeth Loutfi-Hipchen is managing editor for Chief Learning Officer.

To comment, email:  editor@chieflearningofficer.com.