Dice to File Bankruptcy, Going Private

Dice Inc. on Tuesday announced it agreed to a financial restructuring that will force it into pre-packaged Chapter 11 bankruptcy and re-emerge as a private entity.

The online job board reached the arrangement with one of its largest creditors, Elliott Associates (also known as Elliott International), which collectively hold approximately 48 percent of Dice’s 7 percent convertible subordinated notes due January 2005. The outstanding face amount of the notes is $69.4 million.

Under the arrangement, creditors will end up owning 95 percent of the recapitalized company while the current shareholders will own the remaining 5 percent. Elliott
would own approximately 46 percent of the company once Dice emerges from bankruptcy.

“This proposed plan will enable us to put in place a capital structure which is more appropriate for us,” said Scot W. Melland, president and chief executive of Dice Inc. “Our two businesses are operating as usual, including making timely payments to suppliers and service providers.”

Elliott has already agreed to vote in favor of the plan under a lock-up agreement that will allow for the new capital structure. While pursuing this restructuring plan, the company has determined not to make the $2.4 million interest payment on the notes due yesterday, Jan. 27.

The plan provides for the largest shareholders (currently projected to be 130 in number and measured based on a level of shareholdings to be determined) to receive common stock in the company, and the remainder of shareholders to receive an allocation of cash of no more than $50,000 in the aggregate.

In addition to the 5 percent ownership, shareholders receiving new common stock would also receive warrants to acquire an additional 8 percent of new common stock, exercisable at $69.4 million in the aggregate.

“Our focus over the next few months will be to lead Dice through an efficient restructuring process and emerge by mid-2003 as an essentially debt-free company,” said Michael P. Durney, senior vice president and chief financial officer of Dice Inc.

The Company reported that it had $7.5 million in cash and marketable securities as of Dec. 31, 2002, and $7.1 million as of Jan. 24, 2003.

The proposed restructuring plan will be submitted for a vote to all noteholders and Dice Inc. shareholders after the pre-arranged bankruptcy plan has been filed and a disclosure statement relating to the plan is approved by the court.

Dice is a partner of Jupitermedia Corp., the parent of this Web site.

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