Cumulus Media has filed to reorganize in Chapter 11 bankruptcy, with $2.4 billion in debt. The radio giant has reached an agreement with 69 percent of its term loan holders. The company’s pre-packaged restructuring agreement will reduce the company’s debt by more than $1 billion.
Cumulus expects all operations, programming and sales to continue as normal throughout the restructuring process. A release from the company notes that Cumulus has ample cash on hand, as well as funds generated from ongoing operations, to support the business during the financial restructuring.
Mary Berner, President and Chief Executive Officer of Cumulus Media Inc., said, “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. We will use this restructuring process to relieve the financial constraints on our continued progress, allowing us to focus our resources on investing in our business and people to strengthen our competitiveness and ultimately drive growth. We have ample cash to support our operations and service our advertisers, vendors and affiliates during this period, and we look forward to becoming an even stronger partner to all of them when we complete this important phase of our turnaround strategy.
“We appreciate the tremendous efforts of the Cumulus team throughout the business turnaround and thank our employees for continuing to be the true force driving our success.”
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