Westwood One has completed the refinancing of its outstanding long-term debt and the recapitalization of its equity. Westwood One’s then-existing lenders refinanced and exchanged all of their outstanding indebtedness ($241 million in principal) for $25 million in cash, shares of 8.0% Series B Convertible Preferred Stock representing approximately 25% of Westwood One’s equity and $117.5 million aggregate principal amount of new senior secured notes, maturing July 15, 2012.
The Gores Group, Westwood One’s largest stockholder, purchased for cash $25 million of Series B Preferred Stock, and exchanged all of their 7.5% Series A Convertible Preferred Stock for shares of 7.5% Series A-1 Convertible Preferred Stock. As a result of the recapitalization, Gores owns approximately 74.8% of Westwood One’s equity with respect to its preferred stock and Westwood One’s existing common stockholders own approximately 2.5% of the outstanding equity of Westwood One.
Westwood also obtained a new credit facility with Wells Fargo Foothill (perhaps the last the company will issue), comprised of a $20 million subordinated unsecured term loan and a $15 million senior unsecured revolving line of credit to finance working capital and other general corporate purposes. The subordinated term loan and revolving line of credit are guaranteed by certain Gores funds.
“We have reached a significant milestone in Westwood One’s turnaround plan,” said Rod Sherwood, President and CFO of Westwood One. “The refinancing and infusion of additional capital provide key support for our strategic initiatives to drive revenue, improve operating efficiency and acquire new properties to further enhance Westwood One’s traffic, news, sports, talk and entertainment leadership positions.”
As part of the closing, Westwood’s Board was reconstituted with Gores assuming control of the Board. Three Gores’ designees were named to the Board: Andrew Bronstein, Managing Director of Glendon Partners, an operating group associated with Gores, Jonathan Gimbel, Vice President, Mergers and Acquisitions, of The Gores Group and Michael Nold, Managing Director of Glendon Partners.