Spark Networks Shares Restructuring Plans

Spark Networks has shared its financial restructuring plans, detailing its next steps as it looks to prevent insolvency. These plans involve outsourcing departments within the company and re-negotiating loan agreeements.

The company, which operates dating platforms such as Zoosk, filed its latest financial restructuring plans with a court in Germany this month.

The documents state “The Restructuring Plan is intended to prevent the insolvency of [Spark Networks SE] by eliminating risks that could jeopardize its continued existence and resolving any balance sheet over-indebtedness that would have existed without the Restructuring Plan”.

The filings explain that without these plans being implemented, Spark Networks “would have to file for insolvency without undue delay”. The results of insolvency would “have a significant negative impact on…operating business, could lead to an immense loss of reputation among its customers and cause significant losses in value…” 

So what will this restructuring involve?

Spark Networks is set to reorganise its operations by outsourcing certain departments, including parts of the marketing, engineering, maintenance, and customer service teams. “This is also associated with a reduction in the number of employees in the Spark Group”, the statements add.

Layoffs had been announced earlier this year, with Spark Networks looking to close its Berlin operations by January 2024 and part ways with 200 full time employees. 

In addition to internal restructuring, the dating company also reorganised its loans and agreements with investors.

Law360 reports that Spark Networks reached an agreement with creditors that includes “the waiver of almost $30.8 million in debt, up to $24 million in new loans, [and] a $20 million capital raise”.

The article highlights that the dating company owes more than $100 million on a loan from MGG Investment Group, and over $13 million on a loan used to acquire Zoosk in 2019.

Spark Networks explained that it had faced financial difficulties after seeing declining subscriber numbers caused by insufficient marketing, among other things, Law360 reports.

Read Spark Networks full financial restructuring plans here.