Benzinga | May 26, 2021 08:41AM EDT

Cumulus Media Says Accelerates Debt Reduction By Commencing $175M Debt Paydown

Cumulus Media Inc. (NASDAQ:CMLS) today announced that it has initiated actions to pay down $175 million of debt using cash on hand.



Mary G. Berner, President and Chief Executive Officer of CUMULUS MEDIA, said, "As I noted on our recent earnings call, the continuing improvement in economic and public health conditions is fueling very encouraging momentum across all our businesses. Against that backdrop, we are accelerating debt repayments, which will de-lever the balance sheet more quickly, reduce interest expense, and further increase our free cash flow. Since emerging from bankruptcy in 2018, we have reduced our net debt (1) by almost $600 million, despite the impact of a global pandemic. Looking ahead, our better leverage profile and more than $200 million of available liquidity (2) will provide us meaningful financial flexibility as we continue along our strong rebound trajectory. Cumulus Media's strong competitive position, proven track record of solid execution, numerous revenue growth drivers, and ability to consistently generate significant free cash flow give us multiple pathways along which to grow shareholder value in the short- and long-term."

Details of Debt Reduction

On May 17, 2021, the Company completed a $60 million repayment of its ABL Revolver due 2025, which represented the entirety of the amount outstanding under the facility. Following the paydown, the ABL Revolver due 2025 is undrawn and available as liquidity for general corporate purposes.

The Company was required by the terms of its debt agreements to make mandatory debt prepayments from the proceeds of the Company's previously announced sale of land in Bethesda, MD, in June 2020 (the "Land Sale") and sale of towers and related assets (the "Tower Sale") in September 2020, after giving effect to a right of reinvestment. On May 25, 2021, the Company paid down approximately $89 million of its Term Loan Credit Facility due 2026 (the "Term Loan") related to this mandatory prepayment obligation. Approximately $65 million of the prepayment related to the Land Sale, and approximately $23 million of the prepayment related to the Tower Sale.

Additionally, pursuant to the terms of its 6.75% Senior Secured First Lien Notes due 2026 (the "Notes"), the Company launched a tender offer for the Notes at par for approximately $26 million, which represents the pro rata amount required to be offered from the proceeds of the Tower Sale. Following the expiration of the tender offer, any amounts that remain untendered will be directed toward an additional prepayment of the Term Loan.

This press release does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the 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.