(Adds analyst quote, details; updates share movement)
By Brenton Cordeiro
July 25 Debt-laden phone directory publisher
Yell Group Plc said it was considering options that may
result in a dilution of shareholders' interests, as part of a
capital structure review, sending its shares down by more than
Yell would likely look at a debt-for-equity swap, analysts
said. "They don't explicitly mention debt for equity, but that's
what it means," Panmure Gordon & Co analyst Alex Degroote said.
The company, which publishes paper phone books around the
world, has been working to build on its digital offerings but
continues to be weighed down by a massive load of debt.
Yell, which had a market value of about 40 million pounds
($62.11 million) as of Tuesday closing, said net debt stood at
2.18 billion pounds as of June 30.
"They're basically saying that the equity could be wiped
out," Degroote said.
The stock was down 34 percent at 1.14 pence at 0920 GMT on
Wednesday on the London Stock Exchange, with more than 100
million shares changing hands.
"The group intends to consult with its key stakeholders,
including lenders and shareholders over the coming months in
order to put in place an appropriate group capital structure
within the current financial year," the company said.
Directory publishers like Yell and its Canadian counterpart
Yellow Media Inc have struggled to stem the slide in
their print businesses and pare huge debt loads, as more people
turn to Internet-based giants like Google to find local
Yellow Media said on Monday it plans to exchange C$1.8
billion of debt for senior secured notes, subordinated unsecured
exchangeable debt, new common shares and cash to cut debt and
extend debt maturity.
Yell reported a massive 1.42 billion pounds loss before tax
for last year and appointed Goldman Sachs and Greenhill as
advisers to assist it with a new capital structure.
For the first quarter ended June 30, Yell said revenue fell
15 percent to 331 million pounds and that the adverse revenue
and margin trends it reported in May continued to impact
($1 = 0.6441 British pounds)
(Reporting by Brenton Cordeiro in Bangalore; Editing by Don