Citadel Corp files for bankruptcy

Quoting people familiar with the matter, the Wall Street Journal said “the deal would reduce Citadel’s debt load to about US$762.5 million. The company will need to solicit more creditor support in court to get its reorganisation plan approved by a judge.”  Citadel has already received its board’s approval for the bankruptcy filing.

The radio broadcaster is expected to file a “prearranged” deal — a deal supported by many lenders, the daily said. These lenders, who collectively owed US$2 billion, plan to swap a big portion of their debt for equity in a reorganised Citadel, effectively handing them control, the WSJ added.

Citadel Broadcasting loaded up on debt to finance its acquisition of Walt Disney Co’s ABC Radio stations in 2006, a time when radio was a booming industry.