Spanish Broadcasting System is transferring ahead with a prepackaged Chapter 11 chapter submitting below a Restructuring Support Agreement with a bunch 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 mentioned the restructuring will “significantly” cut 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 unlock assets for reinvestment throughout its core enterprise.
That contains elevated spending on native programming, on-air expertise and broadcast infrastructure, in addition to continued enlargement 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 mentioned 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 way of the restructuring course of. The firm mentioned a brand new board of administrators can 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 up expanded operational oversight as the corporate navigates the restructuring and prepares for its subsequent part.
The prepackaged submitting permits SBS to maneuver by way of chapter with lender help already secured, sometimes enabling a quicker and extra predictable restructuring course of in comparison with conventional Chapter 11 circumstances.
The firm says the purpose is obvious: emerge with a more healthy steadiness sheet and renewed give attention to progress in each broadcast and digital audio.
