Back in June Radio One announced what appeared to be a routine refinancing. It even planned to raise additional cash to take advantage of its option to up its stake in TV One. But the refi has proven to be anything but routine – it’s become a financial nightmare.
The subscription offering to let current debt holders finance the TV One equity acquisition was dropped and Radio One has been struggling to come to terms with major debt holders on terms to go forward with the exchange of existing bonds due in 2011 and 2013 for new bonds. Nearly 92% of the outstanding bonds have been tendered, but the conditions necessary to close the tenders have not been fulfilled, so Radio One has repeatedly extended the tender offers – the latest extension announced Tuesday runs to September 15th.
Radio One announced earlier this month that it had also extended its forbearance agreement with Wells Fargo Bank as administrative agent for its bank group.
“The Company is in continuing discussions with representatives of the ad hoc group of holders of a significant portion of its Existing Notes relating to certain amendments to the terms of the exchange offer and the related exchange notes, including the conditions to the exchange offer, and with its lenders under its existing senior secured credit facility relating to an amendment thereto. The Company would need to reach agreements with both groups in order to proceed with an amended exchange offer,” Radio One said in Tuesday’s announcement.