SFX Entertainment to Consider Bankruptcy Filing
January 07 2016 - 7:20PM
Dow Jones News
Concert promoter SFX Entertainment Inc. said Thursday that it
may file for bankruptcy to deal with its continuing debt
troubles.
The company, which puts on electronic-music concerts like the
Electric Zoo festival in New York, said in financial documents that
it received a waiver of defaults on $30 million in debt through
Jan. 28. In connection with that waiver, the company hired
turnaround firm FTI Consulting Inc. to help it examine
restructuring options that may be executed in bankruptcy, according
to the documents.
"In order to facilitate its reorganization, the company may
consider utilizing the available protections under the federal
bankruptcy laws," SFX said in the filing.
Lender Catalyst Fund LP took over the $30 million revolving
credit facility from GoldenTree Asset Management LP on Dec. 31,
according to the documents, and negotiated the waiver at the same
time. SFX had fallen out of compliance with several of the loan's
terms.
Last year, SFX noted in regulatory filings that it may not have
sufficient cash to fund its debt obligations during 2016.
The latest development comes after a failed going-private
transaction last year, led by Chairman Robert F.X. Sillerman, who
made a $4.75-a-share offer for the company in March. That offer
rose to $5.25 a share, but the deal was challenged in the Delaware
Court of Chancery and scrapped in August.
The company has $312.6 million in debt, mainly senior bonds due
in 2019. As of Sept. 30, the date of SFX's most recent earnings
report, the company had $59.8 million in cash on hand.
SFX Entertainment traces its roots back to the 1970s when Mr.
Sillerman founded SFX Broadcasting, which came to own 71 radio
stations. When Mr. Sillerman sold the broadcasting company in 1998,
he retained the event-promotion piece of the business and called it
SFX Entertainment. A few years later, he sold that business to
Clear Channel Communications Inc. for $4.4 billion in stock and
debt assumption. He restarted the live-event business in 2011 with
a focus on electronic-music festivals, and that company went public
in 2013.
Write to Stephanie Gleason at stephanie.gleason@wsj.com
(END) Dow Jones Newswires
January 07, 2016 19:05 ET (00:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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