People ask me if KCAA Radio is making any money. My answer is always the same...No, not really...but we are doing a heck of a lot better than Clear Channel, as this Bloomberg article demonstrates... Bloomberg: Clear Channel Burning Cash to Delay Reckoning. In a piece published by Bloomberg, Krista Giovacco writes that Clear Channel’s recently announced desire to push the due date on $1.8 billion in borrowings from 2016 to another three to five years into the future and almost double the interest rate buys the company time, but also eats into its cash flow. Giovacco reports, “While the proposal gives Clear Channel more time to turn around a business that’s posted losses every year after Bain Capital Partners LLC and Thomas H. Lee Partners LP took control in 2008, it also raises the company’s risk of missing interest payments on $20.7 billion of debt, according to Moody’s Investors Service. After capital expenses, Clear Channel ran a deficit from operations in the year ended June, meaning the company had to eat into cash that’s declined more than 60% since the end of 2010 to $704.2 million. ‘Refinancing at a higher rate is never a positive,’ Scott Van den Bosch, a New York-based senior analyst at Moody’s, said in a telephone interview. ‘It’s not a cure-all, but it buys them time to improve the balance sheet.’” Giovacco further states, “Clear Channel is seeking to extend $1 billion of loans to 2019 from 2016 and is proposing to pay interest of as much as 7.5 percentage points more than the London interbank offered rate, compared with 3.65 percentage points more than Libor on the existing debt, according to Credit Sights Inc, Clear Channel had a free cash-flow deficit of $69.4 million in the year ended June, according to data compiled by Bloomberg. On the trailing 12-month basis, the company burned cash for the first time since 2009, the data show.”
Posted on: Tue, 03 Dec 2013 03:38:05 +0000
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