Westwood One To Refinance Capital Structure
March 3, 2009 at 5:39 AM (PT)
WESTWOOD ONE, INC. has reached an agreement in principle with its existing lenders to refinance all of its outstanding long term indebtedness (approximately $241 million in principal amount) in exchange for $25 million in cash, a series of new senior secured notes in an expected aggregate principal amount of $117.5 million and 25% of the pro forma equity in WESTWOOD ONE. The new notes are expected to mature on JULY 15, 2012.
As part of the refinancing, it is contemplated that entities managed by THE GORES GROUP, LLC, WESTWOOD ONE's largest stockholder, will purchase for cash $25 million of new preferred stock and guarantee or otherwise provide credit support for a $20 million subordinated term loan and a $15 million unsecured revolving line of credit.
Upon consummation of the refinancing, with the new preferred stock it purchases, GORES will own approximately 72.5% of WESTWOOD ONE's equity with respect to its preferred stock and acquire control of WESTWOOD ONE. As a result of the contemplated transactions, existing common stockholders would own approximately 2.5% of the outstanding equity of WESTWOOD ONE.
"The refinancing is an essential part of our turnaround plan," said Pres./CFO ROD SHERWOOD. "We appreciate that our lenders, GORES and our other investors, continue to value our business and recognize the opportunity for long-term growth. A successful completion of the refinancing will allow us to continue to focus on delivering superior content and service, cost effectively, to WESTWOOD ONE customers."