March 20 (Reuters) - Houghton Mifflin Harcourt Publishers Inc has hired restructuring lawyers and financial advisers as it seeks to restructure about $3 billion in debt coming due next year, according to a person familiar with the matter.
The privately held publisher, which specializes in textbooks, is working with restructuring lawyers from Paul Weiss Rifkind Wharton & Garrison and financial advisers from Blackstone Group, according to the person, who was not authorized to speak to the media and declined to be identified.
Restructuring negotiations are in the early stages, and it is too early to tell whether they will lead to bankruptcy, the person said.
The Wall Street Journal first reported that Houghton Mifflin had hired professionals, saying on Tuesday the company had fully drawn down a $236 million credit line due in December 2013 and a $2.6 billion term loan due in June 2014.
Houghton’s credit rating was downgraded by Moody’s Investors Service in January, then again earlier in March. The rating agency said drops in education funding at state and local governments made it hard for Houghton to produce the earnings necessary to reduce its leverage.