Cumulus Files Chapter 11 To Cut $600 Million In Debt

Cumulus Media has entered into a restructuring support agreement with a group of its lenders aimed at eliminating approximately $600 million in debt and strengthening the company’s balance sheet. o implement the agreement, the company and certain subsidiaries filed prepackaged Chapter 11 petitions on March 5 in the U.S. Bankruptcy Court for the Southern District of Texas. Cumulus said it expects to continue operating normally throughout the restructuring process, with no impact to employees, partners or listeners.

President and CEO Mary G. Berner said the move is designed to address the company’s debt burden while allowing Cumulus to continue investing in its strategic priorities. She noted that while the company has achieved share gains in both local and digital revenue, broader macroeconomic and industry pressures have persisted.

The proposed restructuring plan calls for the cancellation of all existing funded debt in exchange for 100% of the company’s reorganized equity and $50 million in new convertible notes. The plan also includes amendments to the company’s asset-based revolving credit facility to maintain liquidity during and after the restructuring.

Cumulus said the required majority of debtholders have already agreed to support the plan. The bankruptcy court is expected to consider approval of the restructuring within 60 days of the filing, after which the company anticipates emerging from Chapter 11 following necessary regulatory approvals from the Federal Communications Commission. More information about the restructuring process is available here.