SBS To Undertake Recapitalization


MIAMI — Spanish Broadcasting System on Monday afternoon confirmed that the company has received a letter from “a recognized multinational financial services broadcast lender” stating that it is “highly confident of its ability” to arrange secured debt financing for SBS in an amount of $300 million.

The debt financing is key to SBS’s planned recapitalization and “will carve out certain non-core real estate and broadcast station assets so that, in connection with the recapitalization, SBS will be positioned to obtain a separate and incremental first lien asset-based financing facility.”

This means certain radio or TV stations could be in play.

SBS intends to use the proceeds from the $300 million of debt financing, plus the proceeds of the additional and incremental asset-based funding, to repay its existing $249.9 million of 12.5% Senior Secured Notes and to make cash purchases of its existing Series B preferred stock.

In prepared comments, SBS CFO José I. Molina said, “SBS has an established track record as a leading Hispanic owner/operator of media, having consistently reported industry-leading growth in its ratings, revenues and margins during the last several years. SBS expects to deliver a robust and certain return to our existing investors while repositioning SBS to continue its forward operating momentum.”

Following the closing of the recapitalization transaction, Molina said SBS “will continue serving our growing base of millions of Hispanics nationwide with today’s relevant news and entertainment programming, as well as the advertisers that target their dynamic purchasing power and expanding social, cultural and political influence. Likewise, we will implement our long-range strategic plans to create incremental value for our new investors.”

SBS COO Albert Rodriguez on Monday afternoon was preparing to fly to New York, in connection with the announcement and for regular meetings at the company’s WSKQ-FM & WPAT-FM.

SBS, trading as “SBSAA,” currently has a stock valued at 16 cents. However, founder and Chairman Raul Alarcón Jr. is a “supermajority” holder of SBS shares and controls the company.