Cumulus Media filed a pre-pack Chapter 11 petition that aims to reduce its debt load by $1 billion.
The company, whose 446 radio stations across 90 markets make it the No. 2 player in the sector, has already reached a restructuring agreement with lenders holding about 70 percent of the company’s term loan.
The $1.73 billion term loan accounts for the bulk of Cumulus’ $2.37 billion in total debt. The remainder consists of $640 million in 7.75 percent senior notes, which mature in May 2019.
The Atlanta company said all operations — like WABC in New York, which carries the Imus in the Morning program, WPLJ 95.5 and Nash FM — will continue uninterrupted.
Cumulus Chief Executive Mary Berner blamed the need for Chapter 11 protection on a “debt overhang left by previous years of underperformance.”
The stations group and the Westwood One syndication arm — which carries Rush Limbaugh — are in the midst of a turnaround, Berner said.
The CEO backed up the claim by citing such measures as “increased ratings, revenue market-share gains, improved employee satisfaction, reduced employee turnover and . . . year-over-year EBITDA and revenue growth.”
In exchange for forgiving $1 billion of debt, holders of the term loan expect to wind up with 83.5 percent of the equity in a restructured Cumulus, according to court documents filed in Manhattan bankruptcy court.
The restructuring will become official on May 27.
Berner has experience leading restructuring as she shepherded Reader’s Digest Association through bankruptcy in 2009.
Berner joined Cumulus in October 2015, replacing Lew Dickey.
In 2011, Dickey negotiated Cumulus’ $2.5 billion acquisition of Citadel Broadcasting Corp. — the country’s No. 3 radio group — which took on a debt load that proved untenable.