Getty Images Stock Plunges as Company Seeks Rescue Financing

Getty Images stock is trading at around 8 cents per share right now, as the company works on a rescue financing deal with its lenders that could also end in a bankruptcy and a lender takeover. The New York Stock Exchange suspended GETY stock on Sept. 29, and the Getty Images stock price has lost more than 99% since listing. Getty did pay its overdue bond interest on Sept. 30, but its debt troubles are far from over.

Getty Images Stock, Bankruptcy Risks, Debt And Rescue Financing

Lender Talks And NYSE Suspension Hit Getty Images Stock

Getty is in confidential talks with lenders about a rescue financing package, possibly through a debtor-in-possession loan, according to Investing.com. Lenders could also take control of the photo company through a court process, and that is the Getty Images bankruptcy scenario shareholders fear most. The Getty family is also thinking about putting in its own money, but the parties have not reached a final decision yet.

A day later, the NYSE halted trading in Getty Images stock and started delisting it, Benzinga reported. The Getty Images stock price closed at $0.0859 over the counter on Sept. 30.

Getty Images Stock Avoids A Default For Now

Holders of Getty Images stock had reason to be nervous all month. Getty skipped interest payments on its 2027 and 2028 notes on Sept. 1 and used a 30-day grace period. It paid on Sept. 30, the last possible day, after S&P Global Ratings warned it would cut Getty to selective default if the money did not arrive.

Getty Images stated in a filing with the Securities and Exchange Commission:

“Because the interest payments were made within the applicable 30-day grace periods, no ‘Event of Default’ occurred under the indentures governing the Senior Unsecured Notes.”

The payment gave GETY stock some breathing room, but the ratings were already grim. S&P cut Getty to CCC after the Shutterstock merger fell apart in July, and Moody’s also lowered it two notches to Caa3, warning that liquidity could get worse without new cash.

Heavy Debt Keeps GETY Stock Near Pennies

At the end of June, Getty had $51.6 million in cash, and it drew the rest of its $150 million revolver in July. It also carried more than $1.3 billion in debt, a heavy load for a penny stock.

CEO Craig Peters had this to say on the August earnings call:

“We are now on a standalone path, and our standalone operating plan starts with addressing our balance sheet. While we firmly disagree with the regulatory outcome and recent court rulings with respect to warrant litigation, it is clear we now need to optimize our capital structure to align with our standalone path.”

CFO Jen Leyden also said:

“Because those efforts may influence our capital structure, our liquidity profile, and our financial outlook, we do not believe it is appropriate to provide guidance at this time.”

At the time of writing, the Getty Images rescue financing talks are still going on. In a bankruptcy where lenders take over, holders of Getty Images stock usually stand at the back of the line, so the stock price will likely keep swinging on every new report.