Granite Broadcasting has reached an agreement in principle on a new senior credit facility that would pay off the interest payment that was due June 1. The company was granted a grace period that expired Friday, June 30.
The facility, which Granite is anticipating should close and fund this week, features two secured loans: a $40 million Tranche A Term Loan and a $30 million Tranche B Loan. Loan B would be convertible to 200,000 shares of Granite’s 12.75% Cumulative Exchangeable Preferred Stock, and approximately $19.9 million of the proceeds will be used to pay the outstanding interest.
Granite’s proposed sales of WDWB Detroit and KBWB San Francisco have not yet closed. Four private-equity firms, led by former Cox and Meredith executive Kevin O’Brien, are trying to buy the stations. The FCC approved the sale last week.
The proceeds from the sales were to be used to fund Granite’s proposed purchase of WBNG Binghamton and Elmira, N.Y. If necessary, Granite says, the facility will allow proceeds from Loans A and B to be used to fund the acquisition.
If Granite is unable to close the facility and fund the interest payment, it may have to seek protection under Chapter 11 of the Bankruptcy Code.
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