Citadel Corp files for bankruptcy

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.