Posted by Bud on December 21, 2009 at 10:06:53:
Citadel Broadcasting Files for Bankruptcy Protection
By Tiffany Kary and Don Jeffrey
Dec. 20 (Bloomberg) -- Citadel Broadcasting Corp., the owner of radio stations in cities including New York and Chicago, filed for U.S. bankruptcy protection in Manhattan.
The company, which syndicates Don Imus's morning talk show through its U.S. radio network, listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing today in U.S. Bankruptcy Court. Forstmann Little & Co., a New York-based private equity firm, owns 29 percent of the company's common stock, according to court papers. The filing covers about 50 units of Las Vegas-based Citadel.
Citadel hired financial advisers in May to aid in talks with lenders on a possible refinancing. U.S. radio broadcasters including Clear Channel Communications Inc., the largest, have struggled with debt loads and a drop in advertising revenue, particularly from carmakers. Citadel reported a loss of $21.3 million in the third quarter as revenue fell 14 percent.
"The ongoing weakness in the economy and advertising spending, compounded by rising debt and leverage" have left Citadel with an "unsustainable capital structure," Neil Begley, an analyst at Moody's Investors Service, said Dec. 11 in a report.
Sales "will continue to decline" this quarter, Citadel said in a Nov. 6 filing with the U.S. Securities and Exchange Commission. The company didn't expect to meet January financial covenants, leading to a default and possibly forcing a bankruptcy filing, Citadel said at the time.
Unsecured Creditors
Citadel listed its largest unsecured creditors as JPMorgan Chase Bank, with an unspecified claim, Wilmington Trust Co., with a claim of $49.2 million and The Walt Disney Co. with a claim of $11.2 million, according to today's filing.
Citadel, which owns WABC in New York and WLS in Chicago, is the third-largest U.S. radio company broadcasting from land- based antennas, behind Clear Channel and CBS Corp. Sirius XM Radio Inc., which charges subscribers for programming transmitted by satellites, is the second-largest radio broadcaster by revenue.
Citadel added debt when it merged its broadcast operations with Disney's ABC radio stations and network in 2007. A credit agreement with lenders required that Citadel have at least $150 million in available cash as of Jan. 15.
The company's cash balance was $27.8 million as of June 30, Standard & Poor's said in September.
Citadel Chairman and Chief Executive Officer Farid Suleman was the third-largest holder with a 3.1 percent stake, behind Wells Fargo & Co. with 5.1 percent, the data showed.
Last Updated: December 20, 2009 12:23 EST