(Reuters) – Music and entertainment company Muzak Holdings LLC said it filed a reorganization plan with a Delaware bankruptcy court that would reduce its debt by more than half to $230 million.
Muzak, which is known for providing background music in stores and hotels, said the plan is supported by a majority of its creditors.
The company filed for bankruptcy in February to restructure is debt.
Under the reorganization plan, holders of Muzak’s $115 million 9.875 percent senior subordinated unsecured notes will receive 100 percent of the new common stock of the reorganized company.
Creditors holding the company’s $220 million 10 percent senior unsecured notes will receive new senior unsecured notes at $135 million face amount as well as $85 million of payment-in-kind preferred stock.
Muzak was owned by private-equity fund ABRY Partners LLC before filing for bankruptcy.
Muzak also outlined its plans for repaying holders of its secured bank debt, senior discount unsecured notes and allowed general unsecured claims.
The company’s reorganization plan is yet to receive bankruptcy court approval and a hearing on the matter is scheduled for October 27.
The case is In re: Muzak Holdings LLC, No 09-10422, U.S. Bankruptcy Court, District of Delaware.
(Reporting by Santosh Nadgir in Bangalore; Editing by Himani Sarkar)