Cunningham Broadcasting Corp. has received another extension from its lenders on a $33.5 million loan. Payment was due today, but Cunningham, which is closely aligned with Sinclair Broadcast Group, now has until Oct. 30 to pay.
The July 31 deadline was an extension of a previous due date with lenders.
The extension requires that Cunningham make $200,000 principal payments on its term loans on the first business day of August, September and October, with the balance due Oct. 30, 2009. During this time, the lenders and Cunningham will work toward a resolution on satisfying the debt maturity.
On a conference call two weeks ago, Sinclair executives said a default on Cunningham's part could drag both into Chapt. 11. Privately-held Cunningham is partially owned by members of Sinclair CEO David Smith's family. Its six stations, including WRGT Dayton and WVAH Charleston-Huntington, have LMAs with Sinclair stations.
Both companies are based in Maryland. Neither returned calls for comment.
Having Cunningham in Chapt. 11 could impact Sinclair to the tune of $50-$60 million, Sinclair execs said on the call, including $26 million in direct contributions for the LMAs, and the rest in annual cost savings and efficiencies between the stations.
Sinclair, with 58 stations, raised the possibility of bankruptcy in an 8-K filing. "Under certain circumstances, creditors may file an involuntary petition for bankruptcy against us," it said. "Due to the possibility of such circumstances occurring, we have begun planning for such potential restructurings."
Sinclair's stock was at $1.87 at presstime.
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