Citadel Broadcasting files for bankruptcy with deal on debt

Citadel Broadcasting Corp, the owner of radio stations in cities including New York and Chicago, filed for US bankruptcy protection in Manhattan with a deal to shed $1.4bn of debt. The company, which syndicates Don Imus’s morning talk show through its US. radio network, listed assets of $1.4bn and debt of $2.5bn in its Chapter 11 filing yesterday in US Bankruptcy Court. Forstmann Little & Co, a New York-based private-equity firm that bought Citadel in 2001 for $2bn, owns 29 per cent of its common stock, according to court papers. The filing covers about 50 units of the Las Vegas-based company. Citadel sought bankruptcy to implement a pre-negotiated plan under which it has the support of 60 percent of its secured lenders, the company said in statement. The plan will convert a $2.1 billion loan into a new $762.5 million term loan, giving senior lenders a pro rata stake, and 90 percent of the shares in the reorganized company. Unsecured creditors and the secured lenders’ deficiency claim of about $900m will get an option of cash equal to 5 per cent of the unsecured claim, capped at $2m, or 10 per cent of the new common stock.