Key3Media obtains court approval for $30 million DIP financing

Chicago, March 27 - Key3Media Group, Inc. said it has received final court approval for $30 million of debtor-in-possession financing, provided by Thomas Weisel Capital Partners. All major creditor constituencies supported the DIP financing.

The company also reached agreement with holders of its senior secured bank debt on the terms of a plan of reorganization. Following the reorganization, the banks will remain lenders to Key3Media under three-year secured notes.

On Feb. 3, Key3Media announced its reorganization plan, backed by investment funds managed by Thomas Weisel Capital Partners, which own 68% of Key3Media's bank debt and 38% of its 11.25% senior subordinated notes due 2011. Through the reorganization, Key3Media will reduce its total debt by 87%, to $50 million from $372 million, and eliminate all its existing preferred stock and common equity. Annual interest expense will be cut to $3.4 million from $38 million.

"These developments represent a major milestone in our efforts to restore the company's financial health," said Fredric D. Rosen, chairman and chief executive officer of Key3Media, in a news release. "Our restructuring process is advancing very well. All of our conferences and tradeshows are progressing as planned with strong participation from customers, and the company is fully funded through the reorganization and beyond."

Key3Media is a producer of information technology tradeshows and conferences based in Los Angeles.

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