Cumulus Says Bankruptcy Exit Now Likely In Late Summer Or Fall.

Cumulus Media raced quickly through the Chapter 11 process this spring, securing court approval for its restricting just six weeks after the company entered bankruptcy. But wrapping up the process will take longer.

In a letter filed with federal court in New York as part of company’s ongoing ratings dispute with Nielsen, lawyers for Cumulus say they are still awaiting approval by the Federal Communications Commission of their plan. Several other conditions will also need to be met first. As a result, they tell the court that consummation of the Chapter 11 plan isn’t expected until “late summer or early fall” adding, “Cumulus expects that it will likely exit bankruptcy shortly thereafter.”

Cumulus filed an application seeking approval of its restructuring plan with the FCC last month. At its core, the restructuring will hand control of the company to its lenders while significantly reducing its debt load. The plan eliminates roughly $592 million of debt and reduce annual cash interest costs by about $49 million. Lenders have agreed to provide up to $100 million to support operations going forward.

The new capital structure is built around equity issued to creditors. The reorganized Cumulus will issue a single class of common equity, split into voting and limited-voting shares. There is also a process to issue special warrants designed to comply with the FCC’s review tied to potential ownership limits and restrictions on foreign investors. Giving Cumulus a head start is a May 2020 decision in which the Media Bureau gave the company permission to increase its foreign holders up to 100%. Cumulus also doesn’t have any over-sized clusters that exceed media ownership limits, further simplifying the FCC review.

“While we await FCC approval of the plan, we remain focused on leveraging our core strengths to drive long-term value creation,” CEO Mary Berner said in April. She has called the reorganization plan a “pivotal milestone” in strengthening Cumulus’ financial foundation and better positioning the company to compete.

Berner and CFO Francisco Lopez-Balboa have inked new employment agreements that will keep them in place at least through at least the end of 2026. Berner will also hold one of seven board seats post-bankruptcy, with the equity holders appointed the others. No names have been disclosed, although court documents say directors will be elected annually by holders of the new voting stock.

In the meantime, Cumulus’ antitrust lawsuit against Nielsen over its ratings sales practices has been on hold since March. Under federal bankruptcy law, most legal actions involving a debtor are delayed while finances are sorted out. Cumulus filed the case last October accusing Nielsen of violating antitrust laws by tying access to its national radio ratings data to the purchase of local market ratings. Nielsen has denied those claims and has filed counterclaims accusing Cumulus of sharing confidential Nielsen ratings data with rival measurement firm Eastlan.