Funds News

Idearc exits bankruptcy, renames itself SuperMedia

*Idearc exited bankruptcy protection on Dec. 31

*Yellow-pages publisher changes name to SuperMedia Inc

*Relists on Nasdaq, has new $2.75 bln credit facility

*CEO says sees product mix changing going forward

By Emily Chasan

NEW YORK, Jan 4 (Reuters) - U.S. yellow-pages directory publisher Idearc Inc IDARQ.PK said on Monday it has emerged from bankruptcy with a new name and a plan to float new shares.

The company which publishes, SuperYellowPages, and, renamed itself SuperMedia Inc and said it would trade on the NASDAQ Global Market under the symbol "SPMD" SPMD.O. It's old shares have been canceled.

“It’s an important step in the future of the company,” the company’s chief executive, Scott Klein, said in an interview with Reuters. ” But it’s not just about restructuring a balance sheet and changing the name, it’s really about having spent the last 18 months literally building a new company.”

Idearc, which was spun off from Verizon VZ.N in 2006, filed for protection from creditors in March, as revenue for its printed directories business dwindled due to a shift to online search and advertising.

While under bankruptcy protection, the company slashed debt to $2.75 billion from about $9 billion. In December, the company said hedge fund Paulson & Co would own almost half the company’s new stock. SuperMedia also has arranged a new $2.75 billion credit facility.

SuperMedia’s equity consists of 60 million shares of common stock and 5 million shares of preferred stock. After former creditors receive shares for their debt, SuperMedia will have about 15 million shares of common stock outstanding, the company said in a release.


It also named a new board of directors including, Thomas Rogers, president and chief executive officer of TiVo Inc TIVO.O and Robin Domeniconi, vice president of U.S. advertising for Microsoft Corp MSFT.O.

Going forward, Klein said the company would continue to build on its financial restructuring.

“We’ve adjusted our product line to make it easier and more sensible for advertisers and potential advertisers to decide to do business with us,” Klein said, saying the company decided on the name change after research showing consumers most strongly recognized its Superpages brand.

The company continues to see strong registration by consumers for its SuperGuarantee program, which can refund customers up to $500 for using their local advertisers if a job is not done correctly, Klein said. It is also planning new initiatives to improve customer searches on its websites.

While the company still does about 85 percent of its business through the traditional phonebook, Klein said he would expect that mix to change, going forward.

“Our online business and direct mail businesses, we would expect to be growth businesses in 2010 and beyond,” Klein said.

The company’s website has helped it reach out to new segments, like car dealers, Klein said, and the company expects to do more with its mobile applications and partnerships with Internet companies going forward.

Klein says his company is also starting to see the effects of the improvement in the economy. Many of the company’s advertisers are small and medium-sized businesses which have been particularly hard hit by the recession.

“We’re starting to see some improvements in retention rates for clients... and we’re seeing our clients and our potential clients more willing to engage,” Klein said.

“Rural markets, and Midwestern markets have started to show some improvements first and a couple of key major metro markets also are showing improvements. The mood is better today for sure than it was a year ago.”

The case is In re: Idearc Inc, U.S. Bankruptcy Court, Northern District of Texas, No. 09-31828. (Additional reporting by Chelsea Emery and Sinead Carew) (Reporting by Emily Chasan, editing by Dave Zimmerman