LONDON — Britain's Saatchi & Saatchi, once the largest advertising agency in the world, unveiled plans Thursday to solve the huge debt problems that threaten its existence.
The plans involve an injection of cash for working capital--to ensure financial stability--and a change in its share structure.
Saatchi is suffering from falling revenue in a worldwide recession, while facing rising costs on debts of $950 million.
The company grew through acquisitions, including the Ted Bates and Dorland agencies, and became famous as the creator of former British Prime Minister Margaret Thatcher's election publicity. Rival agency WPP Group topped it in size with the 1989 purchase of New York's Ogilvy Group.
Saatchi's stock price slumped from a high last year of $5.73 to a mere 46 cents at Thursday's close of trading on the London Stock Exchange. That suggests a market capitalization of around $75 million.
The debt proposals, which depend on the consent of creditors as well as ordinary and preferred shareholders, are the result of four months of work.