The Corporate Restructuring Report-Cumulus Media Inc. (CMIA)
On June 4th, 2018, Cumulus Media Inc. (OTC:CMIA) successfully completed its restructuring plan and emerged from Chapter 11 bankruptcy. Cumulus Media had filed for Chapter 11 bankruptcy on November 29th, 2017. In connection with the plan, the secured claim holders received ~83.5% in new reorganized equity, while unsecured note holders received 16.5% in new eorganized equity. The plan led to elimination of ~$1.03 billion in debt.
Cumulus Media Inc. is a leading pure-play radio broadcaster with large geographic and demographic reach (~245 million people per week). Despite ongoing market challenges in the radio industry, 1Q18 results demonstate continued operational traction and financial progress, with the Radio Station Group turning in its seventh straight quarter of revenue share growth and Westwood One delivering its fifth straight quarter of revenue share growth. The strong results for 1Q18 provide further evidence that the turnaround plan is taking hold.
We are encouraged by continuing operating and financial momentum in the face of negative industry trends. The elimination of ~$1 billion in debt strengthens Cumulus Media's balance sheet, providing it ample room to fund future investment plans. In our view, Cumulus Media is undervalued.
Cumulus Media is a holding company. Through its subsidiaries, the company is engaged in radio broadcasting. The company combines local programming with media, sports and entertainment brands to deliver content choices through stations broadcasting in U.S. media markets, broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Additionally, the company is a provider of country music and lifestyle content through its NASH brand. The main categories of the company's advertisers consist of: amusement and recreation, banking and mortgage, healthcare services, arts and entertainment, food and beverage, telecommunications, automotive dealers, and furniture and home furnishings.
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