Houghton Mifflin Harcourt Publishing Co., a publishing company and major supplier of textbooks, has declared bankruptcy. The company is $3 billion in debt.
The company, with about $1.29 billion in sales last year, said it plans to borrow as much as $500 million through Citigroup Inc. (C) (C) to complete the bankruptcy process, court papers show.
Under the proposed recovery plan, Houghton’s long-term bank loan and bond debt would convert to all of the equity in the reorganized company, according to a May 11 statement. Existing shareholders would receive warrants for 5 percent of the new stock if they voted in favor of the plan. …
Houghton provides educational products and services to about 60 million students in 120 countries, according to its website. The company also prints and distributes electronic books owned by one of Amazon.com Inc. (AMZN) (AMZN)’s publishing arms, under an agreement announced in January.
The accord allows Amazon, the world’s largest Internet retailer, to market books to people who don’t visit its site and provides Houghton with a new source of revenue as sales decline at brick-and-mortar bookstores.
Does this mean an end to the days of students paying hundred of dollars each semester for textbooks and later returning them to recoup a few pennies? Bring on the cheap, online course material!
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