Cumulus Media sues JPMorgan over refinancing plan
By Nate Raymond
NEW YORK (Reuters) - Cumulus Media Inc (CMLS.O: Quote) has sued JPMorgan Chase & Co (JPM.N: Quote) seeking a court order declaring that the second-largest U.S. radio network is allowed to proceed with a refinancing that it says would deleverage the company by up to $305 million.
In a lawsuit filed late on Monday in Manhattan federal court, Cumulus accused JPMorgan of breaching a 2013 credit agreement and "unreasonably" withholding consent to certain components of the Atlanta-based company's planned refinancing.
Cumulus said that JPMorgan's actions in its role as administrative agent under the credit agreement are threatening a deal it recently reached with bondholders, which was contingent upon the refinancing being completed by Jan. 27.
"Cumulus needs to proceed with its proposed refinancing, and it needs to do so quickly," Cumulus said in the complaint.
A spokesman for JPMorgan did not immediately respond to a request for comment.
According to the lawsuit, in response to an industry-wide decline in business, Cumulus, which owns 447 radio stations, has launched a series of initiatives aimed at improving ratings and revenues.
But Cumulus said its ability to follow through on these initiatives is hindered by a "heavy debt load" of $2.4 billion, including $610 million of senior notes due in 2019.
As a result, Cumulus reached a deal with a majority of bondholders in which they would refinance those senior notes using borrowings from Cumulus's $200 million revolving line of credit, the lawsuit said. Continued...