SFX Considering Bankruptcy, Debt Restructuring and Asset Sales

via Wikimedia

Sillerman's failing dance event empire secures a financial crisis management consultant and will appoint a mandated restructuring executive.

SFX Entertainment is undergoing steps to restructure its debt and salvage the business it created to capitalize on the growth of EDM music and culture.

The company announced in an SEC filing that it has modified the credit agreement and assigned the rights of its $30 million revolving credit facility to Catalyst Fund Limited Partnership V. The new agreement gives SFX until January 28 to either default or name Catalyst the debt's administrative agent and accept new terms. Catalyst is requiring SFX to name a Chief Restructuring Officer and will consider lending $20 million for one of its European subsidiaries.

At the same time, SFX has hired a consultancy firm, FTI Consulting, which specializes in assisting companies in financial distress. According to the filing, FTI will help SFX weigh its options for bankruptcy, debt restructuring and other paths such as issuing more debut or equity and selling "some or all" of its assets.

Investors acted on the news, sending SFX shares tumbling 41 percent at Friday morning press time, to $0.13 per share. The share price has fallen 99 percent from its $12 IPO price,  and is down 96.8 percent from the day chairman and CEO Robert Sillerman announced his first of two plans to take the company private.