SFX Entertainment to Consider Bankruptcy Filing

Concert promoter SFX Entertainment Inc. said Thursday that it may file for bankruptcy to deal with its continuing debt troubles.

The company, which puts on electronic-music concerts like the Electric Zoo festival in New York, said in financial documents that it received a waiver of defaults on $30 million in debt through Jan. 28. In connection with that waiver, the company hired turnaround firm FTI Consulting Inc. to help it examine restructuring options that may be executed in bankruptcy, according to the documents.

"In order to facilitate its reorganization, the company may consider utilizing the available protections under the federal bankruptcy laws," SFX said in the filing.

Lender Catalyst Fund LP took over the $30 million revolving credit facility from GoldenTree Asset Management LP on Dec. 31, according to the documents, and negotiated the waiver at the same time. SFX had fallen out of compliance with several of the loan's terms.

Last year, SFX noted in regulatory filings that it may not have sufficient cash to fund its debt obligations during 2016.

The latest development comes after a failed going-private transaction last year, led by Chairman Robert F.X. Sillerman, who made a $4.75-a-share offer for the company in March. That offer rose to $5.25 a share, but the deal was challenged in the Delaware Court of Chancery and scrapped in August.

The company has $312.6 million in debt, mainly senior bonds due in 2019. As of Sept. 30, the date of SFX's most recent earnings report, the company had $59.8 million in cash on hand.

SFX Entertainment traces its roots back to the 1970s when Mr. Sillerman founded SFX Broadcasting, which came to own 71 radio stations. When Mr. Sillerman sold the broadcasting company in 1998, he retained the event-promotion piece of the business and called it SFX Entertainment. A few years later, he sold that business to Clear Channel Communications Inc. for $4.4 billion in stock and debt assumption. He restarted the live-event business in 2011 with a focus on electronic-music festivals, and that company went public in 2013.

Write to Stephanie Gleason at [e-mail]

(END) Dow Jones Newswires

January 07, 2016 19:05 ET (00:05 GMT)

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