Cumulus Media and more than 30 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, lead case number 17-13381. The Company, which owns and operates radio stations, is represented by Paul M. Basta of Paul, Weiss, Rifkind, Wharton & Garrison.
Cumulus Media concurrently announced its entry into a restructuring support agreement (RSA) with, among others, certain of its secured lenders, holding in the aggregate, approximately 69% of the Company’s term loan to reduce the Company’s debt by more than $1 billion. The Company notes that it has ample cash on hand, combined with funds generated from ongoing operations, to support the business during the financial restructuring process. As a result, Cumulus Media does not intend to seek debtor-in-possession financing.
Mary Berner, president and C.E.O. of Cumulus Media, explains, “Over the last two years, we have focused on implementing a business turnaround to reverse the Company’s multi-year ratings, revenue and EBITDA declines, create a culture that fosters motivated and engaged employees, and build an operational foundation to support the kind of performance we believe Cumulus is capable of delivering. As we have demonstrated in many measurable ways – including increased ratings, revenue market share gains, improved employee satisfaction, reduced employee turnover and, over the last several quarters, our return to year-over-year EBITDA and revenue growth – that turnaround has not only been successful but is continuing. However, as we have noted consistently, the debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed. The actions we are taking today to address our balance sheet are a critical step forward for Cumulus.”
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