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Judge Rejects Cumulus Media's Refinancing Plan
RADIO ONLINE | Monday, February 27, 2017 |
A U.S. judge has rejected Cumulus Media's refinancing plan meant to help reduce its $2.4 billion in debt load. Filed in December, the company sued JPMorgan Chase for preventing Cumulus from implementing its refinancing plan by breaching a 2013 credit agreement and "unreasonably" withholding consent to refinance. Cumulus had sought a court order allowing it to proceed with its refinancing bid that would deleverage its debt by up to $305 million.
U.S. District Judge Katherine Polk Failla in Manhattan sided with JPMorgan who had argued the transaction was not permitted under the current credit agreement, a position Failla adopted. "I do not believe it permits the proposed refinancing," she said.
Cumulus announced a plan in December to exchange the senior notes for a combination of stock and up to $305 million in secured debt borrowed through a $200 million revolving credit line. The deal was reached with a majority of Cumulus' senior noteholders. The company said the refinancing must be completed by March 13, when the exchange offer is scheduled to expire. In a statement, Cumulus said, "While we are certainly disappointed by the court's decision, we will continue to review all available options to address our balance sheet issues. We are making solid progress in our turnaround, and remain focused on exploring strategies that would give us the runway needed to fully execute our plan."
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