Report: Citadel Prepares Bankruptcy Filing
December 10, 2009 at 3:28 PM (PT)
The WALL STREET JOURNAL is reporting that CITADEL BROADCASTING CORP. is preparing to file for bankruptcy by the end of the year, according to its sources. The filing would bring to reality talk that has been circulating about the company for several months.
The JOURNAL reports that a pre-packaged Chapter 11 bankruptcy plan has been presented to lenders this week, with lenders owed $2 billion swapping "a substantial amount of that debt" for about 99.5% of the reorganized company's equity, while current shareholders would lose everything. Lenders have a deadline of next TUESDAY to sign off on the deal; the JOURNAL says that the move would cut CITADEL's debt load to about $760 million. Leading lenders in the group have voiced support for a deal, but holders of 2/3 of the outstanding debt must still approve the deal.
CEO FARID SULEMAN will likely remain in charge of the company, the JOURNAL reports.