Judge Rejects Cumulus Refi Plan
A U.S. judge last Friday rejected Cumulus Media’s bid to proceed with a refinancing plan that it hoped would help reduce its $2.4 billion debt load, but was opposed by some lenders. Reuters reports this decision by Manhattan-based U.S. District Judge Katherine Polk Failla was in reference to a lawsuit Cumulus filed in December, accusing JPMorgan Chase & Co of withholding consent to parts of its refinancing plan. The suit stemmed from the company’s efforts to reduce its debt load, which includes $1.8 billion in secured loans and $610 million of unsecured senior notes due in 2019.
On Dec. 6, 2016, Cumulus announced a plan to exchange the senior notes for a combination of stock and up to $305 million in secured debt borrowed through a $200 million revolving credit line, but JPMorgan, in its role as administrative agent and a group creditors objected to the deal and argued the transaction was not permitted under the credit agreement, a position Judge Failla concurred with, as she said, “I do not believe it permits the proposed refinancing.” Cumulus Media shares fell sharply in Friday trading on the NASDAQ stock exchange as the ruling was announced. Its shares last traded at 75 cents, down 25 percent.
