Ion Media Networks has come to terms with the majority of its senior lenders and filed a pre-packaged Chapter 11 bankruptcy petition. The company says the restructuring will extinguish $2.7 billion in debt and inject $150 million of new capital.
The company said a group of holders of over 60% of Ion’s first lien senior secured debt had signed on to the restructuring plan.
“We are pleased with the support from our first lien senior debt holders to resolve the company’s legacy debt issues and fund our television growth plans. We look forward to working with all senior debt holders and other stakeholders to facilitate a complete and expeditious restructuring. We are positioning the business for growth and will emerge from the restructuring in a strong position to serve viewers, clients, and stakeholders,” said Ion Chairman and CEO Brandon Burgess.
The financial restructuring contemplates extinguishing over $2.7 billion in legacy indebtedness and preferred stock and capitalizing the company with a $150 million new funding commitment underwritten by a group of first lien holders. Participation in the new funding commitment, which is part of a $300 million facility that converts into equity upon completion of the restructuring, will be made available to all holders of Ion’s first lien senior secured debt.
A previous recapitalization of Ion, the former Paxson Communications, in 2007 made Citadel Investment Group its primary owner, after cashing out public shareholders. NBC Universal holds a large non-voting stake. Once the Chapter 11 reorganization is approved by a federal bankruptcy judge, they’ll have Ion’s current senior debt holders as new equity partners.
Ion owns some 60 local television stations – the nation’s largest group – which distribute its Ion Television network, along with several DTV multicast channels.