Spanish Broadcasting System Enters Chapter 11. | Story
Spanish Broadcasting System is shifting ahead with a prepackaged Chapter 11 chapter submitting underneath a Restructuring Support Agreement with a gaggle of main lenders, a step the corporate says will strengthen its steadiness sheet and place it for long-term progress.
The settlement is backed by funds and accounts managed by Brigade Capital Management, subsidiaries of Man Group, and Bayside Capital, which collectively maintain greater than 72% of the excellent principal on SBS’s 9.750% Senior Secured Notes due 2026.
Under the phrases of the deal, these noteholders will obtain 100% of the fairness within the reorganized firm, topic to a brand new administration incentive plan and the issuance of recent secured notes.
SBS stated the restructuring will “significantly” scale back debt, decrease curiosity expense and prolong the maturity of its obligations by greater than 4 years, whereas additionally enhancing liquidity. The firm expects the streamlined capital construction to unencumber assets for reinvestment throughout its core enterprise.
That consists of elevated spending on native programming, on-air expertise and broadcast infrastructure, in addition to continued growth of its LaMusica digital platform and different progress initiatives.
“With greater financial flexibility and a simplified capital structure, the Company is expected to be better positioned to expand audience reach, support advertisers, and deliver compelling content across on-air and digital platforms,” SBS stated in saying the settlement.
Leadership continuity can be a part of the plan. CEO Raúl Alarcón will stay in his function and proceed as Chairman by the restructuring course of. The firm stated a brand new board of administrators will likely be appointed following emergence from Chapter 11 in accordance with the settlement.
At the identical time, SBS is elevating Richard D. Lara to Chief Operating Officer. Lara will retain his duties as General Counsel whereas taking over expanded operational oversight as the corporate navigates the restructuring and prepares for its subsequent part.
The prepackaged submitting permits SBS to maneuver by chapter with lender assist already secured, usually enabling a quicker and extra predictable restructuring course of in comparison with conventional Chapter 11 instances.
The firm says the purpose is evident: emerge with a more healthy steadiness sheet and renewed concentrate on progress in each broadcast and digital audio.
