It was first reported on April 8: Spanish Broadcasting System — the company founded in 1983 by Raúl Alarcón Jr. — moved forward with a restructuring support agreement that sees it intend “to commence voluntary Chapter 11 cases” under U.S. bankruptcy code in a Delaware court.
The process to implement a balance sheet restructuring plan as begun, with a prepackaged bankruptcy filing made on Monday (5/11) in a Delaware federal court.
With the “RSA” agreed to, as SBS has secured the support of holders of more than 90% of the outstanding principal amount of its notes — the company’s funded debt — the company has solicited and expects to obtain approval of its reorganization plan “on an expedited basis.”
With a goal of positioning SBS for long-term success, noteholders will receive all of the company’s common stock and up to $70 million in new secured notes. Alarcón will remain CEO, as the original IPO for SBS involved a portion, but not all, of the ownership in the company — retaining a supermajority position for the founder.
Creditors are expected to be “unimpaired” and trade creditors will be paid in full in the ordinary course of business for goods and services provided, SBS said.
“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 said in an announcement.
Alarcón added, “This restructuring represents an important step forward in strengthening our balance sheet and positioning the company for the future. We have strong alignment with our key stakeholders and a clear path to emerge with a significantly strengthened capital structure.”
SBS is represented by Fried, Frank, Harris, Shriver & Jacobson LLP and Morris, Nichols, Arsht & Tunnell LLP as legal counsel; Riveron Management Services is Chief Restructuring Officer and as restructuring financial advisor; and GLC Advisors & Co. LLC as restructuring investment banker.
The supporting investors are represented by Milbank LLP as legal counsel and M3 Advisory Partners LP as financial advisor.
