Alpha Media files bankruptcy, cites headwinds due to Covid-19

By Sarah Lizee

Olympia, Wash., Jan. 25 – Alpha Media Holdings LLC filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the Eastern District of Virginia.

“Following a healthy financial performance in 2019, the debtors experienced significant headwinds beginning in the first quarter of 2020 due to macroeconomic factors brought on by the Covid-19 pandemic,” the company said in court documents.

In response, the debtors commenced the Chapter 11 cases to implement the terms of a comprehensive balance sheet restructuring with the company’s second-lien lenders and unsecured noteholders.

The restructuring transactions will effectuate a recapitalization of the debtors’ roughly $267 million of pre-petition funded debt, which includes a $74.97 million first-lien term loan due 2022, $15,04 million first-lien revolver due 2021, $72.64 million second-lien notes due 2022 and $103.93 million unsecured notes due 2023.

ICG Debt Administration LLC has agreed to provide $37.5 million of new money in the form of a second-lien secured note purchase facility, $20 million of which represents a conversion, at emergence, of a senior priming post-petition debtor-in-possession financing that ICG has also agreed to provide. The company is seeking interim access to $5 million of the financing.

Plan details

According to the company’s disclosure statement, holders of other secured claims will receive payment in full in cash or receive the collateral securing their claims.

Holders of first-lien debt claims will receive their pro rata share of first-lien recovery notes or payment in full in cash.

Holders of second-lien notes claims will receive their pro rata share of 100% of new securities subject to dilution by the management incentive plan equity.

Pre-petition HoldCo notes claims will be canceled and holders will receive no distribution.

Holders of general unsecured claims will have their claims reinstated.

Topco interests will be canceled.

On the effective date, reorganized Alpha Media will acquire 100% ownership of reorganized Alpha Media USA, LLC. All of the remaining other interests will be retained by the applicable reorganized debtor without altering the organizational structure of the debtors as it existed as of the petition date.

All consideration to make payments or distributions will be obtained from a DIP facility, an exit second-lien note facility or other cash from the debtors, including cash from business operations.

Debt details

The company said in court documents that it has $10 million to $50 million in assets and $267 million in debt.

The company’s largest unsecured creditors are ICG North America Holdings Ltd., based in New York, with a $103.97 million unsecured notes claim and Nielsen Audio, Inc., based in New York, with a $2.37 million sales and marketing claim.

Alpha Media is a Portland, Ore.-based radio station operator. The company filed bankruptcy under Chapter 11 case number 21-30209.

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