[Edaily Reporter SIN SOO-JUNG ] Getty Images, a global photography and video content company, has filed for bankruptcy protection and will transition to a privately held company. This comes as competition from AI-generated images intensifies, compounded by a heavy debt burden and the collapse of a merger with a competitor. After its stock price plummeted by approximately 99% following its 2022 stock market relisting, the company has ultimately embarked on a comprehensive restructuring of its financial structure.

According to Reuters on the 12th (local time), Getty Images announced that it has reached a restructuring agreement with creditors and investors and plans to begin bankruptcy protection proceedings under Chapter 11 of the U.S. Bankruptcy Code within the coming weeks.

This process is a pre-arranged bankruptcy protection procedure, in which the company reaches a restructuring agreement with creditors in advance and then swiftly obtains court approval. Getty Images plans to complete the restructuring by the end of the year and transition to a privately held company.

Getty Images is a global content company that supplies photos and videos in the fields of news, sports, and entertainment. Along with Reuters and the Associated Press, it provides visual content to major media outlets and corporations.

However, the competitive landscape of its existing image sales business is shifting due to the recent proliferation of generative AI technology. With the emergence of services capable of generating images using AI, competition among traditional photo and video content providers is intensifying.

Getty Images sought a breakthrough by pursuing a merger with its competitor Shutterstock but withdrew the plan last June. Following the collapse of the merger, the need for financial restructuring to address high debt and competition from AI-generated images has grown.

As of the end of June, the company’s debt stood at approximately $2.1 billion (about 2.8 trillion won). In contrast, its market capitalization, based on the closing price on the 9th, was only about $20.74 million (about 27.7 billion won). This means the company’s debt exceeds its market capitalization by more than 100 times.

Getty Images returned to the U.S. stock market for the first time in 14 years in 2022 through a merger with a special purpose acquisition company (SPAC). At the time, its enterprise value was valued at approximately $4.8 billion (about 6.4 trillion won).

However, since its relisting, its stock price has fallen by about 99 percent. The New York Stock Exchange also initiated delisting proceedings against Getty Images in late September.

Through this restructuring, Getty Images plans to raise substantial capital and reduce its debt burden.

Affiliates of the Getty family and Koch Equity Development have agreed to inject up to $533 million (approximately 711 billion won) in new capital. Once the restructuring is complete, these two investors will hold 100% of the shares in Getty Images, which will become a privately held company.

Unsecured creditors have agreed to write off $270 million (approximately 360 billion won) in debt. Secured lenders have also agreed to reduce interest burdens and extend debt maturities.

Coke Equity Development plans to provide up to $143 million (approximately 190 billion won) in separate funding to support the bankruptcy protection proceedings.

Getty Images stated that it plans to continue operating normally during the restructuring period and to pay its suppliers in full according to the existing schedule. It also expects there to be no impact on customers, content providers, or employees.

Getty Images had previously withdrawn its existing earnings guidance last August, citing its review of strategic financing options and a plan to improve its financial structure. At that time, it appointed the investment bank Guggenheim Securities as its financial advisor to develop a response strategy.