In a surprise announcement this morning (3/5), Cumulus Media Inc reveals it has entered into a comprehensive restructuring support agreement (RSA) with a group of its lenders to eliminate approximately
$600 million of debt, “substantially deleveraging its balance sheet and enhancing its ability to execute on strategic priorities.” The company says it will continue operating in the ordinary course throughout the process, with no impact to employees, partners, or listeners.
Cumulus president and CEO Mary G. Berner states, “While we have outperformed the market on many of our most important metrics, including share gains in both local and digital revenue, the broader 
macroeconomic and industry-wide pressures we have faced have remained unrelenting. Against that backdrop, it became clear that Cumulus’s remaining debt burden limited our ability to fully realize the company’s potential, and this agreement represents a major step forward. The prepackaged process is intended to address the company’s debt efficiently with no disruption to our operations, our people, and our strategies. On emergence, a stronger financial foundation will better position Cumulus to continue investing in premium content, enriched audience experiences, advertiser performance enhancements, and the ongoing growth of our digital marketing offerings.” Cumulus has filed a proposed Plan of Reorganization that incorporates the terms of the RSA and is subject to approval by the Court. The requisite majority of debtholders committed to vote in favor of the Plan, which calls for the cancellation of 100% of the company’s existing funded indebtedness in exchange for 100% of the company’s reorganized equity and $50 million of new convertible notes, as well as the amendment and restatement of the company’s asset-based revolving credit facility to provide continued liquidity. Cumulus expects that the Court will hold a hearing to consider the approval of the Plan within 60 days of the filing date and that the company will emerge from bankruptcy following receipt of required regulatory approvals from the Federal Communications Commission.