Company Troubles
Since October 2007, Citadel has suspended nighttime HD Radio broadcasts on 10 AM stations due to interference complaints. Those AM stations switched their nighttime broadcasts to C-QUAM AM Stereo until Citadel and Ibiquity fix the problems.
On March 1, 2008, the former Disney/ABC Radio stations in Citadel's portfolio faced severe financial problems. That same day, hundreds of personalities were dismissed.
On September 12, 2008; Citadel Broadcasting has received a notice from the New York Stock Exchange (NYSE) warning them that they will be facing a delisting after the company shares fell below the continuing listing criteria in the past 30 days. On February 27, 2009, the NYSE carried out that action. After an IPO of $20.67 in August 2003, and a high of $22.70 in December 2003, CDL closed at $0.01 on March 6, 2009. Delisting happened on March 5, 2009; its stock now trades on the OTC Bulletin Board.
Since the delisting, the staff of Citadel Broadcasting ceased holding conference calls and would no longer issue quarterly guidance. But the 10-Q filed May 7, 2010 at the U.S. Securities and Exchange Commission (SEC) indicated that Citadel expected to remain in compliance with lender covenants through 2009. Given the current conditions, it would be unlikely for the company to meet the benchmarks it had to hit in 2010, starting January 15 of that year. Citadel is carrying $2 billion in debt following the June 12, 2007 deal with Disney for the ABC Radio properties. Overall, Citadel's revenue fell almost 23%.
In a quarterly SEC filing, the company disclosed the possibility of a Chapter 11 bankruptcy. The company, in the filing, says that it "does not expect to meet its covenant requirements under the Senior Credit and Term Facility as of January 15, 2010." The Wall Street Journal reported that Citadel worked on a "prearranged" bankruptcy package in which lenders would get ownership of Citadel in exchange for forgiving about $2 billion of the company's $2.76 billion-dollar debt. The filing began on December 20, 2009.
During that period, its Senior lenders took 90% of the equity, and the re-structuring approved by a Manhattan federal bankruptcy judge is now complete. The company’s debt was sliced by two-thirds from $2.14 billion to $762.5 million, and was poised to be an acquirer as well as an operator.
On Dec. 11, 2009, the Wall Street Journal reported that Citadel planned to file for bankruptcy by the end of the month, and Citadel filed for bankruptcy 9 days later. It emerged from bankruptcy in June 2010, owned by its lenders, the Dallas hedge fund R2 Investments, JPMorgan Chase and the buyout firm TPG.
Read more about this topic: Citadel Broadcasting
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