Key3Media agrees recapitalization with Thomas Weisel funds

New York, Feb. 3 - Key3Media Group, Inc. announced a planned recapitalization with backing from investment funds managed by Thomas Weisel Capital Partners. Implementation is planned through a prepackaged Chapter 11 filing in the U.S. Bankruptcy Court for the District of Delaware.

The Thomas Weisel funds own 68% of Key3Media's bank debt and 38% of its outstanding bonds, the 11¼% senior subordinated notes due 2011.

Under terms of the debt restructuring, the Thomas Weisel funds will receive 99% of Key3Media's equity with the remaining 1% going to unsecured creditors and bondholders. The unsecured creditors and bondholders will also receive warrants for a further 10% of the equity.

Through the recapitalization, Key3Media will reduce its debt 87% to $50 million from the current $372 million.

All existing preferred stock and equity will be canceled.

Thomas Weisel Capital Partners will provide $30 million in debtor-in-possession financing for the Los Angeles producer of information technology tradeshows and conferences.

Key3Media said it aims to emerge from bankruptcy within 90 days.

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