Network radio programming firm Westwood One has announced it has completed the refinancing of its outstanding long-term indebtedness and the recapitalization of its equity.
Network radio programming firm Westwood One has announced it has completed the refinancing of its outstanding long-term indebtedness and the recapitalization of its equity.
As part of the recapitalization, Westwood One’s lenders refinanced and exchanged all of their outstanding indebtedness (approximately USD241m in principal amount) for USD25m in cash, shares of 8.0 per cent series B convertible preferred stock representing approximately 25 per cent of Westwood One’s equity and USD117.5m aggregate principal amount of new senior secured notes, maturing 15 July 2012.
Entities managed by private equity firm Gores Group, Westwood One’s largest stockholder, purchased for cash USD25m of series B preferred stock, and exchanged all of their 7.5 per cent series A convertible preferred stock for shares of 7.5 per cent series A-1 convertible preferred stock.
As a result of the recapitalization, Gores owns approximately 74.8 per cent of Westwood One’s equity with respect to its preferred stock and Westwood One’s existing common stockholders own approximately 2.5 per cent of the outstanding equity of Westwood One.
Westwood One also obtained a new credit facility with Wells Fargo Foothill, comprising a USD20m subordinated unsecured term loan and a USD15m senior unsecured revolving line of credit to finance working capital and other general corporate purposes. The subordinated term loan and revolving line of credit are guaranteed by certain Gores funds.
‘We have reached a significant milestone in Westwood One’s turnaround plan,’ says Rod Sherwood, president and chief financial officer of Westwood One. ‘The refinancing and infusion of additional capital provide key support for our strategic initiatives to drive revenue, improve operating efficiency and acquire new properties to further enhance Westwood One’s traffic, news, sports, talk and entertainment leadership positions.’
‘We have increased our investment in Westwood One because we continue to recognize the opportunity for long-term growth,’ says Scott Honour, senior managing director of The Gores Group. ‘The company is well-positioned in the media market, with a strong competitive offering, leading content and services and a focused, customer-centric orientation.’
As part of the closing, Westwood One’s Board was reconstituted with Gores assuming control of the board. Three Gores’ designees were named to the board: Andrew P. Bronstein, managing director of Glendon Partners, an operating group associated with Gores; Jonathan I. Gimbel, vice president, mergers and acquisitions, of The Gores Group; and Michael F. Nold, managing director of Glendon Partners.
Westwood One is the largest independent provider of network radio programming and the largest provider of traffic information in the US. It serves more than 5,000 radio and TV stations in the US.
