In 2019, the company raised $250 million in debt financing, and the following summer, it raised an additional $74 million through stock issuance.
In May 2021, in part to finance its exploration of joining the public markets via a special purpose acquisition company, the company raised $25 million in bridge notes. And in August 2021, it raised an additional $110 million in equity financing.
Exploring a sale
By spring 2022, despite its repeated infusions of capital, the company again found its cash supply dwindling. On top of a contracting ad market, Vice also faced the looming maturity—in December—of one of its largest loans.
The urgency of the situation moved the company to sell itself. Initially, Vice considered selling either the entire company or its constituent parts—particularly Vice Studios and ad agency Virtue—but by the summer, it began focusing solely on offers for the whole business.
During this period, between February and November 2022, Vice again had to raise capital to address cash shortfalls, this time generating $328 million through a series of shareholder loans.
While the volume of debt the company raised was extensive, debt financing can be an effective tool if a company believes an exit event is imminent, according to a financial analyst familiar with the matter. So long as Vice sold itself, its mounting debt was not a problem.
However, while these outreach efforts garnered two serious bidders and a series of advanced negotiations, by late 2022, the discussions had ended.
Forbearance and debt obligations
In December, with no sale in sight, the $250 million loan the company had raised in 2019 reached maturity, and Vice was unable to pay it.
This default triggered a series of penalties, including an increase in its interest rates. To buy time, Vice entered, lapsed and reentered three consecutive forbearance agreements, each extending its payment timeline.
As the company grew more desperate to sell itself, it again faced a cash shortfall and in the spring, raised $57 million in debt. This loan was related to the 2019 loan, and the two, when combined with the interest-rate hikes from its December default, eventually totaled $475 million.