Cengage Learning files for bankruptcy protection

STAMFORD, Conn. (AP) -- Textbook publisher Cengage Learning said Tuesday it has filed for reorganization under Chapter 11 bankruptcy protection.

The company said the move will allow it to restructure its balance sheet and reduce its debt, which currently stands at $5.8 billion. Cengage said it has reached a restructuring agreement with a group of lenders who hold about $2 billion of its debt. It said the lenders will support a transaction that will eliminate more than $4 billion in debt from its balance sheet.

The company said it has enough cash on hand and a strong enough cash flow that it does not need or intend to obtain debtor-in-possession financing. It has an agreement with its secured lenders that permits it to continue to use cash flow from operations to continue to fund the business. In late March, the company said it borrowed $430 million, or virtually the entire remaining available amount under its revolving credit facility, to ensure that it had sufficient liquidity.

At that time, it also retained restructuring, financial and legal advisers to help it assess its operations.

Cengage posted a net loss of $2.16 billion for the three months ended March 31, far wider than the loss of $84.7 million it reported for the year-ago quarter. Revenue for the quarter was $353.4 million, up slightly from $337.2 million the year prior.

For the nine months ended March 31, the company's net loss stood at $2.12 billion, on revenue of $1.3 billion. For the year ended June 30, 2012, it posted net income of $18.2 million, on revenue of $1.99 billion.

Cengage said it filed for Chapter 11 bankruptcy protection in the Bankruptcy Code for the Eastern District of New York.