Westwood One Agrees in Principle on Terms to Refinance Capital Structure
March 03 2009 - 7:30AM
PR Newswire (US)
NEW YORK, March 3 /PRNewswire-FirstCall/ -- Westwood One, Inc. (OTC
Bulletin Board: WWON) announced today that it has reached an
agreement in principle with its existing lenders to refinance all
of its outstanding long term indebtedness (approximately $241
million in principal amount) in exchange for $25 million in cash, a
series of new senior secured notes in an expected aggregate
principal amount of $117.5 million and 25% of the pro forma equity
in Westwood One. The new notes are expected to mature on July 15,
2012. As part of the refinancing, it is contemplated that entities
managed by The Gores Group, LLC, (together with its affiliates,
"Gores"), Westwood One's largest stockholder, will purchase for
cash $25 million of new preferred stock and guarantee or otherwise
provide credit support for a $20 million subordinated term loan and
a $15 million unsecured revolving line of credit. The term loan and
line of credit are expected to be provided by a new institutional
lender and to be used to finance working capital and other general
corporate purposes. Upon consummation of the refinancing, with the
new preferred stock it purchases, Gores will own approximately
72.5% of Westwood One's equity with respect to its preferred stock
and acquire control of Westwood One. As a result of the
contemplated transactions, existing common stockholders would own
approximately 2.5% of the outstanding equity of Westwood One. The
refinancing and infusion of additional capital will be significant
milestones in Westwood One's turnaround initiative which includes
actions to reduce debt, drive revenue initiatives, improve
operating efficiency, increase financial flexibility and acquire
new properties to further enhance the Westwood One's traffic
reporting, news, sports and entertainment leadership positions.
"The refinancing is an essential part of our turnaround plan," said
Rod Sherwood, President and CFO of Westwood One. "We appreciate
that our lenders, Gores and our other investors, continue to value
our business and recognize the opportunity for long-term growth. A
successful completion of the refinancing will allow us to continue
to focus on delivering superior content and service, cost
effectively, to Westwood One customers." The terms described above
and the closing of these transactions remain subject to the
negotiation of definitive documentation by Westwood One, its
existing lenders, the new institutional lender and Gores, and
customary closing conditions, including antitrust regulatory
approvals. No assurance can be given that any of these parties will
execute definitive documentation or that any of the contemplated
transactions will occur at all. The refinancing and the Gores
investment are contemplated to occur concurrently with one another
and, subject to the foregoing, are anticipated to occur in the
second quarter of 2009. Moelis & Company is serving as
financial advisor to Westwood One in connection with the
transaction. Skadden, Arps, Slate, Meagher & Flom LLP is
serving as Westwood One's legal advisor. Chanin Capital Partners is
serving as financial advisor to The Gores Group. Proskauer Rose LLP
is serving as The Gores Group's legal advisor. The foregoing
summary is not intended to be an exhaustive description of the
refinancing or the terms and conditions thereof, which will be set
forth in definitive documentation to be negotiated by Westwood One,
its lenders and Gores. Upon the signing of any definitive
documentation, such agreements will be filed in a Form 8-K or other
appropriate filing with the SEC. About Westwood One Westwood One
(OTC:WWON) (BULLETIN BOARD: WWON) is the largest independent
provider of network radio programming and the largest provider of
traffic information in the U.S. Westwood One serves more than 5,000
radio and TV stations in the U.S. Westwood One provides over 150
news, sports, music, talk and entertainment programs, features and
live events to numerous media partners. Through its Metro Traffic
division, Westwood One provides traffic reporting and local news,
sports and weather to over 2,200 radio and TV stations. Westwood
One also provides digital and other cross-platform delivery of its
network and Metro content. Certain statements in this release
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Westwood One to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The words
or phrases "guidance," "expect," "anticipate," "estimates" and
"forecast" and similar words or expressions are intended to
identify such forward-looking statements. In addition any
statements that refer to expectations or other characterizations of
future events or circumstances are forward-looking statements.
Various risks that could cause future results to differ from those
expressed by the forward-looking statements included in this news
announcement include, but are not limited to: our ability to
negotiate and execute definitive documentation of the transactions
contemplated by the refinancing and infusion of additional capital;
our ability to continue as a going concern; and obtaining requisite
approval by Westwood One's Board of Directors and antitrust
regulatory authorities for the transactions contemplated by the
infusion of additional capital. Other key risks are described in
Westwood One's reports filed with the SEC, including its most
recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q. Except as otherwise stated in this news announcement,
Westwood One does not undertake any obligation to publicly update
or revise any forward-looking statements because of new
information, future events or otherwise. DATASOURCE: Westwood One,
Inc. CONTACT: Peter Sessa of Westwood One, +1-212-641-2053, Web
Site: http://www.westwoodone.com/
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