* Idearc seeks pre-packaged bankruptcy
* R.H. Donnelley hires Lazard to evaluate capital structure
* Both companies post losses
March 12 (Reuters) - U.S. telephone yellow-pages companies Idearc Inc (IDAR.PK) and R.H. Donnelley Corp (RHDC.PK) said on Thursday they were undertaking restructuring efforts with bondholders as both companies continue to deal with a sharp drop in advertising revenue.
In a statement, Idearc Inc said it was considering restructuring its debt through a "pre-packaged" or "pre-negotiated" bankruptcy while its competitor R.H. Donnelley said it hired Lazard to help the debt-laden company evaluate its capital structure.
In a pre-packaged filing, a company negotiates a restructuring outside of Chapter 11, arranging new terms with creditors, suppliers and lenders and seeking quick approval by a judge.
"If the company is unable to achieve a "pre-packaged," "pre-negotiated," or similar plan of reorganization, it would likely be necessary that the company file for reorganization under federal bankruptcy laws in any event," Idearc said in a statement.
Earlier in the day, R.H. Donnelley Chief Financial Officer Steven Blondy said the company plans to start talks with its bondholders and banks on amending, refinancing or restructuring its debt obligations. [ID:nBNG451543]
In its earnings release, Idearc said it anticipates that it may be non-compliant with its quarterly leverage ratio covenant sometime in the first half of 2009, based on current forecasts.
Idearc added that non-compliance with this covenant was considered an event of default and its lenders may declare the total secured debt outstanding to be due and payable.
The credit crisis and recession have taken a heavy toll on the core customers of both companies, leading to an unabated fall in advertising revenue for the yellow-page publishers.
Early last month, Moody's Investors Service had warned that R.H. Donnelley and Idearc were likely to pursue a pre-packaged bankruptcy or distressed debt exchange as they struggled to overcome high debt loads. [ID:nN09534950]
Idearc said in light of its ongoing review of alternatives for strengthening its balance sheet and financial risk profile, it will not provide an update on its earnings outlook for 2009. (Reporting by Santosh Nadgir in Bangalore; editing by Vinu Pilakkott)