Equity Media Lands $58 Million Loan

by Mark Hengel  on Monday, Feb. 2, 2009 11:35 am  

Equity Media Holdings Corp. of Little Rock has landed a $58 million credit line through its largest creditor.

The broadcasting company filed for voluntary Chapter 11 restructuring, citing $41.5 million it owes Silver Point Finance LLC of Greenwich, Conn., its largest debtor. Silver Point agreed to finance the $58 million "debtor in protection" loan, according to documents from the U.S. Bankruptcy Court for the Eastern District of Arkansas.

The loan includes a $9 million revolving credit line and a term loan of up to $46 million. The agreement reached between Equity and its creditors also appoints Kim D. Kelly has chief restructuring officer.

Equity lost about $133 million between 2001 and Sept. 30, 2008, when the company's second quarter earnings were released, according to Securities & Exchange Commission documents.

The loan will allow Equity to continue operations, maintaining the value of properties, the document said.

"The availability of interim loans under the DIP Facility ... will provide necessary assurance to the Debtors' ability to meet their near-term obligations," the document stated. "Failure to meet these obligations and to provide these assurances likely would have both a short-term and long-term negative impact on the value of the Debtors' business, to the detriment of all parties in interest."

Equity's board will have no say in Kelly's actions as CRO, according to the filing. The deal also resolves Silver Point's motion to convert the Chapter 11 case to a Chapter 7 liquidation.

On the revolving loan, Equity will pay the London Interbank Offered Rate on the first day of an interest period plus 8 percent. For the term loan, Equity will pay the Libor rate on day of the interest period plus 10 percent.

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