Cumulus to Restructure – Files for Chapter 11 Bankruptcy Protection

On one hand, you could argue it’s pretty impressive — Cumulus declares bankruptcy, but in the process manages to negotiate $1 billion off it’s total debt. Will it be enough?

Cumulus GlobeBy Paul Marszalek
TheTop22.com

On November 1, Cumulus made the decision not to pay a nearly $24 million interest payment on senior lending notes that are due in 2019. They basically had a 30 day grace period to make a final decision. If they failed to pay, they would be in default.

Tonight they announced that, indeed, they would instead enter Chapter 11 restructuring.

It’s been a spectacular slide for the operator of 446 radio stations in 90 cities. As recently as 2014, Cumulus stock was trading at more than $64 a share. When Lew Dickey left 18 months later, it had dropped to about five and a half bucks. As of this writing, 15 cents.

The good news for Cumulus is that it has managed to restructure with its creditors, shaving more than $1 billion off its roughly $2.3 billion total debt. That’s big, and will give the company more time to turn around.

Will it be enough? Last quarter, Cumulus reported revenue of $287 million — but net income of just $1.3 million. That kind of margin won’t cut it, so there will be more creativity to come.

Filed Under: Actual NewsFeaturedNewsRadio and Records

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