Spanish Broadcasting System has agreed to a prepackaged Chapter 11 bankruptcy as part of a Restructuring Support Agreement with funds and accounts managed by Brigade Capital Management LP, subsidiaries of Man Group plc, and Bayside Capital LLC.
The three funds hold in excess of 72% of the outstanding principal amount of its 9.750% Senior Secured Notes due 2026. The holders will receive 100% of the common stock in the reorganized company subject to issuances of equity to Company management pursuant to a new management incentive plan, and new secured notes issued by the reorganized company.
SBS says that the restructuring “is expected to strengthen the Company’s balance sheet by significantly reducing debt, lowering interest expense, extending the maturity of the Company’s notes by over four years, and enhancing liquidity, enabling investment in local programming, talent, and broadcast infrastructure, as well as the Company’s LaMusica digital platform and other digital growth vectors. 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”.
Raúl Alarcón will continue his leadership of the Company in his role as Chief Executive Officer, and will continue to serve as Chairman of the board of directors through the consummation of the restructuring. Upon consummation of the restructuring, SBS anticipates that its new board of directors will be elected by its stockholders in the manner set forth in the RSA. Richard D. Lara has been promoted to Chief Operating Officer and will continue to serve as General Counsel, maintaining oversight of the Company’s legal affairs while assuming expanded operational responsibilities.
