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Cengage Learning Confirmation Announced

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Cengage Learning announced that the U.S. Bankruptcy Court confirmed its Amended Joint Chapter 11 Plan of Reorganization; however, a formal confirmation order was not yet docketed with the Court. The Plan received full support from all of the Company’s major stakeholders, and Cengage Learning anticipates emerging from bankruptcy within the next few weeks. Michael Hansen, chief executive officer of Cengage Learning, comments, “We have used this process to establish a new capital structure with a substantially stronger balance sheet. We expect to emerge as an even more competitive and well-capitalized company, with excellent liquidity and greater financial flexibility to accelerate our growth and continue to meet the evolving needs of our users and customers.” As previously reported, “The plan will eliminate more than $4 billion of Cengage Learning’s approximately $5.8 billion of outstanding funded debt. The Company will secure exit financing of approximately $1.75 billion to $2.0 billion, of which approximately $250 million will be an undrawn revolving credit facility upon the Company’s completion of its financial restructuring. In addition, current first lien lenders will receive a substantial majority of the equity of the reorganized company and second lien creditors and unsecured creditors will share in $225 million in cash or stock based on total enterprise value of $3.6 billion, at their election.” This educational content provider filed for Chapter 11 protection on July 2, 2013, listing $7.5 billion in pre-petition assets.

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