Yesterday, in the wake of an announcement that the company is considering Chapter 11 filing, shares of Sinclair Broadcast Group plunged 21%.
The Baltimore Sun has an analysis of the current state of the Baltimore-based company…
Sinclair Broadcast Group Inc., faced with falling advertising revenue from automakers amid the recession, said it might consider filing for bankruptcy protection if the company cannot pay substantial debt coming due.
The Hunt Valley-based owner of television stations, which depends heavily on automotive advertisers for revenue, said it might be obligated to pay $488.5 million of its total outstanding debt within the next 18 months. The company said it had $1.3 billion in total debt outstanding as of March 31.
If note holders exercise options in May and January 2011, “We do not have the cash necessary to meet our [debt] repurchase obligations,” the company said in a filing with the Securities and Exchange Commission. In the July 10 filing, the company also said it has been unable to sell its non-TV assets because of a lack of buyers with access to credit.
If it is unable to restructure debt or secure debt and equity financing through capital markets, the broadcaster said, it might consider selling assets or restructuring through a voluntary Chapter 11 bankruptcy filing. More…