What's Next For Emmis Communications?
September 10, 2010 at 4:24 AM (PT)
ALL ACCESS reported YESTERDAY (NET NEWS 9/9) that the attempt by JEFF SMULYAN to take EMMIS COMMUNICATIONS private was over. The company issued a statement calling an end to the deal and saying that the firm will continue as a public company.
But as THE INDIANAPOLIS BUSINESS JOURNAL points out, that's not the end of the story. The paper writes, "EMMIS COMMUNICATIONS CORP.’s large amount of debt will continue to weigh on the company following CEO JEFF SMULYAN’s failed attempt to take the company private. EMMIS, which has been awash in red ink, must contend with more than $340 million in debt. Including noncash charges, operating losses over the last two fiscal years totaled more than $500 million. On a positive note, only $4 million of the company's debt comes due within a year."
"If the bank doesn’t want to renew this facility, that’s going to be a challenge," said WINTHROP CAPITAL MANAGEMENT GROUP Pres. GREG HAHN. "But I think SMULYAN’s a great operator, and he’s got a great team. At some point it [EMMIS] needs to generate enough income to pay interest and to pay down that debt. But it’s not growing its capital base; it’s not throwing off a lot of cash."
EMMIS stock closed YESTERDAY at $1.22, down $0.42. Follow the stock price here.
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