Balance Sheet Highlights of the Transaction
After transaction fees and expenses and related costs, the Company received approximately
- As defined in the Debt Agreements, net proceeds of approximately
$64 million from assets being sold and not being leased back (the “Sale Proceeds”) and net proceeds of approximately$96 million from assets being sold and leased back (the “Sale-Leaseback Proceeds”) are required to pay down the Term Loan and be applied to a tender offer with respect to the 6.75% Notes on a pro rata basis. - The paydown from the Sale-Leaseback Proceeds is required to be made at closing for the Term Loan portion and within thirty (30) days of closing for the 6.75% Notes. As such, at closing, the Company paid down approximately
$49 million of its Term Loan at par, and it intends in the near future to launch a tender offer for up to approximately$47 million of the 6.75% Notes at par. Any amounts offered but not accepted under the tender offer will be used for an additional par paydown of the Term Loan. - The mandatory prepayment/tender offer required in connection with the Sale Proceeds is subject to a 12-month reinvestment right.
This press release does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the 6.75% Notes, nor does it constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Operating Highlights of the Transaction
At closing, the Company entered into a master lease agreement for the continued use of substantially all of the towers that were sold:
- The initial term of the lease is ten (10) years, followed by five (5) option periods of five (5) years each.
- The annual lease payment obligation for the assets leased back in the initial closing is approximately
$13.2 million , subject to customary escalators, and will be accounted for as a reduction of the financial liability and interest expense. - Annual tenant revenues of approximately
$2.2 million and operating expenses of approximately$2.3 million (of which approximately$1.5 million is non-cash intangible amortization) will no longer be reflected in the Company’s financial statements. The Company will report non-cash imputed rental income for tower sites where it continues to use a portion of the tower along with other existing and future tenants. - The transaction will not have any effect on the Company’s current broadcast operations.
The Company anticipates that one or more subsequent closings will be held for the assets comprising the remainder of the previously announced
About
Disclosure Regarding Forward-Looking Statements
Certain statements in this release may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are statements other than historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial, and strategic performance. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors including, but not limited to, risks and uncertainties related to the implementation of our strategic operating plans, the evolving and uncertain nature of the COVID-19 pandemic and its impact on the Company, the media industry, and the economy in general and other risk factors described from time to time in our filings with the
For further information, please contact:
Investor Relations Department
IR@cumulus.com
404-260-6600
Source:
2020 GlobeNewswire, Inc., source