The Company announced the “closing of the sale and issuance of 7,142,857 shares of Westwood One common stock to Gores Radio Holdings, LLC”. This was the first step in an overall cash infusion of up to $100 million equity investment by Gores into Westwood One as announced by the two entities on February 25th. These initial shares were sold at a price of $1.75 per share for an aggregate amount of $12.5 million.
Furthermore, Westwood One announced that the latest amendments to their credit agreements with lenders led by JP Morgan Chase previously announced are now effective, and that “20% of the net cash proceeds from the Gores investment will be used to prepay the term loan under the Credit Agreement”.
These equity financing should dispel WON’s debt concerns. WON ended this year with a net debt leverage ratio of 3.6x, which was close to the 4x limit in its covenants, we believe the investment should provide WON with sufficient financial flexibility to whether the economic downturn.
