Here’s Another Broadcast Company Prepaying A Loan
A perennial Wall Street winner and Cumulus Media now have something in common beyond the ownership of AM and FM radio stations.
Entravision Communications Corp. on Dec. 30 made a prepayment of $20 million of term loans under the company’s senior secured term loan credit facility entered into on May 31, 2013.
Entravision, which superserves Hispanic media consumers, funded the prepayment by using cash on hand.
Following the prepayment, approximately $293 million remained outstanding under the company’s term loan credit facility.
“Our solid balance sheet and sound financial performance provides us with the opportunity to proactively manage our capital structure,” Entravision Chairman/CEO Walter Ulloa said in a statement released Jan. 3. “We are well positioned to execute on our strategic plan and continue to invest in our growth opportunities.”
Entravision move came at the same time Cumulus confirmed that it has completed a discounted prepayment of a portion of its $1.8 billion senior secured term loan facility due December 2020.
Cumulus successfully purchased $28.7 million of face value of its senior secured term loan for $20 million — a 30% discount. The transaction closed on Friday.
As a result, Cumulus will see a one-time non-operating gain of approximately $8.7 million in its fiscal Q4 and FY2016 earnings.
ULLOA GETS A NEW SALARY DEAL
Entravision’s debt prepayment came after the company on Dec. 26 entered into a new employment agreement with Ulloa, who is set to continue as Chairman/CEO through at least Dec. 31, 2019.
Ulloa’s new deal follows a three-year contract that expired Dec. 31, 2016.
The new deal sees Ulloa receiving an annual base salary of $1,250,000 for 2017, 2018 and 2019.
Ulloa’s base salary will be reviewed annually by Entravision’s compensation committee; they have been empowered with awarding Ulloa with any raises during the next three years. Furthermore, Ulloa is eligible to receive an annual bonus of up to 100% of his then-applicable base salary pursuant to such factors, criteria or annual bonus plan(s).
Ulloa is also eligible to receive grants of stock options, restricted stock and other grants under Entravision’s 2004 Equity Incentive Plan, or any successor plan thereto, on the same terms as the company’s other executive officers.
Should Ulloa be terminated by Entravision without cause, he is entitled to receive all accrued salary and bonuses through his termination date; a cash payment in an amount equal to the greater of two times his then-current base salary (or the amount of his then-current base salary multiplied by a fraction, the numerator of which is the number of months remaining in the term of the agreement and the denominator of which is 12); a cash payment in an amount equal to two times his average annual bonus for the three years preceding such termination; continuation of all benefit coverage (or reimbursement for expenses incurred in collection with such benefit coverage) for a period of two years after such termination; immediate vesting of, and the lapse of all restrictions applicable to, all unvested stock options and any other equity incentives that vest solely based on the passage of time granted to Ulloa and outstanding immediately prior to such termination; and vesting of any performance-based equity incentives awarded to Ulloa and outstanding immediately prior to the such termination.
If Ulloa’s employment is terminated by Entravision for cause, all payments under Ulloa’s agreement shall cease, except for all accrued salary and bonuses through the date of termination and a prorated bonus in an amount equal to the product of his average annual bonus for the two years preceding such termination multiplied by a fraction, the numerator of which is the number of days preceding the termination date in the then-current calendar year and the denominator of which is 365.