ACKERLEY COMMUNICATIONS INC. SUCCESSFULLY RESTRUCTURES ALL OF ITS SENIOR DEBT
ACKERLEY COMMUNICATIONS INC. SUCCESSFULLY
RESTRUCTURES ALL OF ITS SENIOR DEBT
SEATTLE, Nov. 7 /PRNewswire/ -- Ackerley Communications Inc. (AMEX: AK) announced today that the company has completed a successful restructure of its senior debt. The definitive agreement has been made with the company's senior and subordinate leaders -- First National Bank of Chicago (the company's agent bank), Chase Manhattan Bank, Bank of California, Seafirst Bank and various insurance companies.
The company's ability to complete this successful restructure in these economic conditions indicates the lenders' confidence in the fundamental strength of the company. Barry Ackerley, chairman and chief executive officer of Ackerley Communications Inc., expressed satisfaction that the restructure was completed. "After what has turned out to be a difficult year for the media industry, we have completed a very favorable restructure of the company's debt. We feel the prospects for 1992 are bright." SUCCESSFUL RESTRUCTURE OF DEBT
The successful restructure of debt encompasses the following key points:
All defaults have been waived or cured.
Principal and Interest-
All interest due has been paid. All but $2.5 million of the $162 million in senior debt and all of the $80 million in subordinated notes is now classified as long term debt. Principal and interest payments on the $162 million will be made quarterly with the first principal payment due June 30, 1992. Interest on the senior debt is based on the London InterBank Offered Rate (LIBOR) plus 2-1/2 percentage points. Currently this translates into an 8-percent annual interest rate. No principal payment is due on the $80 million of subordinated notes until Dec. 15, 1996. As previously required, the company will make quarterly interest payments.
New Credit Line-
A new $9.5 million line of credit from the senior lenders is available to the company. Currently, the company has borrowed $6.5 million of this amount. The interest rate on all amounts borrowed under this new credit line is First Chicago's prime lending rate plus 3 percentage points. Currently this translates into a 10- 1/2 percent annual interest rate.
The principal payment schedule has been favorably revised. The company will pay $9 million in current debt ($6.5 million of the new line of credit payable on Sept. 30, 1992, and $2.5 million of senior debt payable in two payments -- June 1992 and September 1992). All other debt is long-term and payable on an agreed upon schedule.
All financial ratios have been modified and new covenants have been set to reflect the increase in principal (new credit line) and new interest rate of the senior debt.
The new agreement allows the company to respond to changes in the media industry that reflect this difficult economic environment. By slowing down the amortization schedule of the $162 million in senior debt, the company can now focus on increasing the profitability of its operations. RESULTS OF EXPENSE REDUCTION PLAN
The company also announced the first results of the expense reduction plan
that was initiated in June 1991. For the quarter that ended on Sept. 30, 1991, the company was able to reduce its operating expenses by $2.1 million. This represents a 7 percent reduction from expenses incurred for the same period during the prior year.
In addition to the successful restructure and the reduction of expenses, the company also announced today that it has reached an agreement in principle to sell radio station WBOS-FM in Boston. By mutual agreement of the parties, the identity of the buyer will be released when the agreement is filed with the Federal Communications Commission (FCC).
Ackerley Communications is a multimedia advertising business, with interest in outdoor advertising, airport display advertising, broadcasting and professional sports, specifically the Seattle SuperSonics.
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/CONTACT: Susan Mortensen of Ackerley Communications Inc., 206-624-2888/
(AK) CO: Ackerley Communications Inc. ST: Washington IN: ADV ENT SU: RCN RJ-LM -- SE006 -- 2365 11/07/91 16:19 EST