Continuing to slash away at its $1.1 billion in debt, Cumulus Media said Wednesday it has made a voluntary prepayment of $115 million on its first lien senior secured term loan. In the year since emerging from bankruptcy, the radio company has reduced total outstanding debt by $200 million, it says. Additionally, net leverage has declined from about 5.8-times at emergence to approximately 4.8 times with this payment.
The debt prepayment is being funded by net proceeds of its sale of six radio stations to Educational Media Foundation, which closed on May 31. For $103.5 million in cash, Cumulus shed hot AC WPLJ New York (95.5); hot AC “Mix 107.3” WRQX Washington, DC; “Talk 106.7” WYAY Atlanta; “K-Fog” KFFG (97.7) San Jose (which simulcasts alternative KFOG San Francisco); hot AC “102.1 The Sound” WZAT Savannah, GA; and classic rock “The Rebel 105.9” WXTL Syracuse, NY.
Separately, as previously announced, Cumulus is selling KLOS-FM Los Angeles to Meruelo Media for $43 million in cash. That transaction is still expected to close in third quarter 2019. Those net proceeds will also be used to pay down debt.
Mary Berner, Cumulus President and CEO, said, “In our ongoing efforts to strengthen the business, Cumulus has been relentlessly focused on executing our key strategic priorities and meeting our financial objectives. The milestone we achieved today — $200 million of debt reduction in the first year since we emerged from Chapter 11 — resulted from those efforts and is another example of the progress we continue to make in implementing our business plan.”