Cumulus Media has announced it has filed for a prepackaged Chapter 11 bankruptcy, seeking to eliminate $600 million in debt.
In a statement, the company says it will continue operating “in the ordinary course throughout the process, with no impact to employees, partners, or listeners.”
The company began the prepackaged Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas on Thursday morning. A proposed plan for a comprehensive restructuring support agreement calls for the cancellation of 100% of the company’s existing debt in exchange for 100% of the company’s reorganized equity and $50 million of new convertible notes. That plan is subject to court approval.
In a statement, Cumulus Media CEO and President Mary Berner shared that this is a necessary step for the company.
“While we have outperformed the market on many of our most important metrics, including share gains in both local and digital revenue, the broader macroeconomic and industry-wide pressures we have faced have remained unrelenting,” said Berner. “Against that backdrop, it became clear that Cumulus’s remaining debt burden limited our ability to fully realize the Company’s potential, and this agreement represents a major step forward.
“The prepackaged process is intended to address the Company’s debt efficiently with no disruption to our operations, our people, and our strategies. On emergence, a stronger financial foundation will better position Cumulus to continue investing in premium content, enriched audience experiences, advertiser performance enhancements, and the ongoing growth of our digital marketing offerings.”
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