As expected, Citadel filed for bankruptcy protection today ....Here is their press release...
Citadel Broadcasting Corporation (OTC BB: CTDB) (“Citadel” or the “Company”) today announced that it has reached an accord with over 60% of its senior secured lenders on the terms of a pre-negotiated financial restructuring that would extinguish approximately $1.4 billion of indebtedness. Notably, support for the restructuring proposal was solicited only from private-side lenders, yet the Company still received support from more than 60% of the Company’s total secured lenders. The financial restructuring contemplates that Citadel’s $2.1 billion secured credit facility will be converted into a new term loan in the principal amount of $762.5 million. Holders of senior secured claims will receive a pro rata share of the new term loan and 90% of the new common stock in reorganized Citadel. The pre-negotiated restructuring further contemplates that holders of unsecured claims, including the secured lenders’ deficiency claim of approximately $900 million, the Debtors’ unsecured notes and general unsecured claims will have the option to receive either a pro rata share of cash in an amount equal to 5% of the unsecured claim (capped at $2 million) or 10% of the new common stock, subject to dilution for distributions under reorganized Citadel's management equity incentive program.
“We are pleased with the support from the majority of our senior lenders, and we look forward to working with the remaining senior lenders and other stakeholders to ensure a complete and expeditious restructuring”
To implement the terms of the pre-negotiated restructuring on an expeditious basis, Citadel and certain of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
"We are pleased with the support from the majority of our senior lenders, and we look forward to working with the remaining senior lenders and other stakeholders to ensure a complete and expeditious restructuring," said Farid Suleman, Citadel’s Chief Executive Officer. “Our business will continue as usual and the Company will work to emerge from the restructuring process as quickly as possible."
To fund its restructuring, Citadel has reached an agreement with its secured lenders to access more than $36 million of cash on hand, as well as all cash flow from operations, which will be more than sufficient to fund operations during the restructuring process. Citadel also intends to seek customary relief from the Bankruptcy Court to ensure that operations continue without interruption, including authorization to continue paying employee wages and salaries, as well as honoring certain customer obligations and programs.
Kirkland & Ellis LLP is serving as legal counsel and Lazard Frères & Co. LLC. as financial advisor for the restructuring. Additional information about Citadel is available at the company’s website www.citadelbroadcasting.com. For access to Court documents and other general information about the Chapter 11 cases, please visit www.kccllc.net/citadel.