SOURCE: PrivCo Media LLC

PrivCo Media LLC

February 21, 2013 06:00 ET

PrivCo -- LIVINGSOCIAL Receives Emergency $110M Debt Infusion From Existing Investors With Oppressive Terms

NEW YORK, NY--(Marketwire - Feb 21, 2013) - LivingSocial has just received $110 million in emergency financing from some of its existing investors today, in a last ditch attempt to save the privately-held daily deals company from imminent financial ruin, PrivCo has confirmed exclusively, until the company can be sold by year's end to recoup whatever is still possible.

PrivCo exclusively confirmed the terms of the distressed financing (which was NOT a "new VC round" as has been widely misreported) with both a senior executive at LivingSocial familiar with the transaction, as well as a current LivingSocial venture capital investor participating in the new emergency debt financing.

Distressed Financing Included The Following Onerous Terms (PrivCo Exclusive):

  • LIVINGSOCIAL Issued A New Complex Class of Convertible Debt Securities, Convertible Into a New Class of Preferred Stock With More New Preferences -- EQUITY or stock was NOT issued as widely misreported
  • "Super liquidation preferences" of several times the $110 Million in debt
  • A large issuance of "Super-Warrants" for still more shares in LivingSocial attached to the Secured Convertible Debt
  • Double-digit annual cash dividends to be paid by LivingSocial
  • Re-pricing of participating investors' previous rounds

PrivCo's Hamadeh concluded: "LivingSocial's issuance of this onerous emergency debt financing effectively means that its most recent investors entirely control the equity of the company. LivingSocial essentially threw itself at the mercy of its investors -- who had already sunk over $823 million in the company before today's $110 million additional lifeline -- to avoid a total collapse of the company that would have occurred within days. Regardless, this will likely be LivingSocial's -- and the daily deals bubble's -- final gasp."

To access PrivCo's Exclusive Reporting On LivingSocial's Emergency Financing:

About PrivCo

Based in New York, PrivCo is the leading provider of private company financial data and business research. PrivCo publishes exclusive financial data on over 168,000 private companies, as well as over 51,000 private company deal details, including private company mergers & acquisitions, private equity and venture capital investments, leveraged buyouts, pre-IPO activity, restructurings, and more.

Contact Information

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    Sam Hamadeh
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