SBS Outlines Plan To Undertake Recapitalization

Courtesy of SBS
Spanish Broadcasting System logo.

The Spanish Broadcasting System, Inc., better known as SBS, has revealed plans to repay debt and purchase preferred stock in connection with its planned recapitalization, Billboard has learned.

Per an official statement, SBS received a letter from a recognized multinational financial services broadcast lender stating that it’s highly confident of its ability to arrange secured debt financing for SBS in an amount of $300 million. The debt financing will carve-out certain non-core real estate and broadcast station assets so that, in connection with the recapitalization, the Miami-based company will be positioned to obtain a separate and incremental first-lien asset-based financing facility.

"SBS has an established track record as a leading Hispanic owner/operator of media, having consistently reported industry-leading growth in its ratings, revenues, and margins during the last several years," stated José I. Molina, Chief Financial Officer of SBS in an official statement.

Molina adds: "SBS expects to deliver a robust and certain return to our existing investors while repositioning SBS to continue its forward operating momentum. Following the closing of the recapitalization transaction, we will continue serving our growing base of millions of Hispanics nationwide with today's relevant news and entertainment programming, as well as the advertisers that target their dynamic purchasing power and expanding social, cultural and political influence. Likewise, we will implement our long-range strategic plans to create incremental value for our new investors."

As part of their plan to repay debt and purchase preferred stock, SBS intends to use the proceeds from the $300 million of debt financing plus the proceeds of the additional and incremental asset-based funding to repay its existing $249.9 million of 12.5 percent Senior Secured Notes and to make cash purchases of its existing Series B preferred stock. 

SBS, one of the largest owners and operators of radio stations in the U.S., which also has television and internet properties, targets the U.S. Hispanic in regions such as Los Angeles, Miami, and New York. It was founded by Cuban radio personality Pablo Raúl Alarcón Sr. and his son, Raúl Alarcón Jr. in 1983 in New Jersey.


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