Cumulus Media Files for Bankruptcy - Owners of WPRO, HOT 106 and LITE 105

Cumulus Media Files for Bankruptcy - Owners of WPRO, HOT 106 and LITE 105

Wednesday after the markets closed, Cumulus Media reported it filed for bankruptcy. The goal is to shed more than $1 billion in debt.

In the Rhode Island market, this is the second time this radio cluster of stations has filed for bankruptcy in the past eight years. In 2009, Cumulus predecessor Citadel filed for bankruptcy. The company owns WPRO AM, WPRO FM, HOT 106, and LITE 105.

In the past two years, Cumulus’ stock has been crushed. Investors were forced to agree to an 8-to-1 stock swap and then saw the stock drop from $1.32 to $0.15 per share. The company was delisted by NASDAQ earlier this month.

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In the bankruptcy announcement, Mary Berner, President and Chief Executive Officer of Cumulus Media Inc., said, “Over the last two years, we have focused on implementing a business turnaround to reverse the Company’s multi-year ratings, revenue, and EBITDA declines, create a culture that fosters motivated and engaged employees, and build an operational foundation to support the kind of performance we believe Cumulus is capable of delivering.”

“However, as we have noted consistently, the debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed,” she added.

The company claims 69 percent of the secured lenders have agreed to the bankruptcy provisions and the shedding of debt.

Earlier this month, the company missed an interest payment on debt totaling $23 million.

The impact to the Rhode Island cluster will likely trigger more austerity and cuts.

On Monday, Talkers magazine publisher Michael Harrison predicted that Cumulus would enter bankruptcy and forewarned that the largest radio group — iHeart — may not be far behind.