Steel City Media Bankruptcy Update
A second bankruptcy filing was made for WPNT Inc., Steel City’s holding company for Hot AC “Q92.9” WLTJ and Variety Hits “96.9 Bob-FM” WRRK Pittsburgh placing them into the restructuring initiated by the Kansas City holding company yesterday.
The creditor list for WPNT Inc. is combined with that of MGTF Media. The company released the following press release about the filings.
MGTF Radio Company, LLC and WPNT, Inc. d/b/a Steel City Media, (the “Company”) announced today that the Company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company will continue to operate its business while it seeks to reorganize under Chapter 11. The petitions were filed in U.S. Bankruptcy Court for the Eastern District of Missouri in St. Louis, Missouri on March 20, 2018. Following a review by its board of directors of the available alternatives, the Company determined that Chapter 11 reorganization is in the best long-term interests of the Company, its creditors and its stakeholders.
“The Company remains very profitable and expects to be able to generate sufficient cash from operations to meet the expenses of running our business during the Chapter 11 proceedings,” said Michael Frischling, the Company’s Vice President. “Despite having paid down our senior lender by more than $20 million, or more than 35%, since 2014, softness in our markets has resulted in non-compliance with certain technical covenants. We believe that Chapter 11 is the appropriate venue to seek to resolve these issues. We look forward to emerging from Chapter 11 as an independently owned strong player in our markets and with a reset capital structure in place for the long term.”
The Company has engaged Robert Eggmann and Thomas Riske and the law firm of Carmody MacDonald P.C. as counsel, and Gordian Broadcast Technologies as financial advisor to assist it in exploring a variety of alternatives, including stand-alone recapitalization and potential third-party investment scenarios. The Company has initiated preliminary discussions with certain of the Company’s key constituencies, including lenders under the Company’s senior credit facility and subordinated notes, as well as certain potential financing partners.
Under Chapter 11, a company is protected from its creditors while it continues to operate its business and to negotiate a restructuring and/or repayment plan with its financial creditors. The Company’s plans with respect to its recapitalization contemplate that its trade suppliers, unsecured trade creditors, employees and customers would not be materially adversely affected by the outcome of the process, although there can be no assurance of such outcome.
Original Report 3/20: MGTF Media, owners of four Kansas City stations doing business under the name Steel City Media has filed for Chapter 11 bankruptcy protection.
MGTF purchased CHR “Mix 93.3” KMXV, Country 94.1 KFKF, AC “KC 102.1” KCKC, and Country “Q104” 104.3 KBEQ from Wilks Broadcasting in June 2014 for $105.5 million. The company is owned by Michael, Gregg, and Todd Frischling who along with their father Saul also own Hot AC “Q92.9” WLTJ and Variety Hits “96.9 Bob-FM” WRRK Pittsburgh, which are not involved in this bankruptcy filing.
Steel City lists estimated assets and liabilities both between $50 and $100 million. The largest creditors include Fifth Third Bank owed $38,477,998, Business Development Corp. of America owed a loan of $24.5 million, Nielsen Audio owed $108,828.78, and Katz owed $63,905.09.