SFX Entertainment has been struggling financially all 2015 and those woes are not going anywhere in 2016. According to new SEC filings, the company is preparing for the worst and considering a bankruptcy as a possible solution to try and get out from under its crushing debt.
The New Year started ominously when GoldenTree Asset Management assigned its $30 million revolving credit facility given to SFX to Catalyst Fund Limited Partnership V. SFX and Catalyst entered into a forbearance agreement.
On Thursday, Jan. 7, SFX said in a filing with the SEC that is has hired FTI Consulting as a chief restructuring officer to bring bankruptcy on the table. In the filing, this is what SFX had to say to about FTI's role in the potential bankruptcy.
"FTI will assist the Company in evaluating and assessing various restructuring and strategic alternatives, including working with management to analyze and optimize operations and financial performance. There can be no assurance that the Company will be successful in identifying or implementing, on favorable terms or at all, any financial or strategic alternatives, which may include restructuring the Company's debt, the issuance of additional equity or debt, or the sale of some or all of the Company's assets. In order to facilitate its reorganization, the Company may consider utilizing the available protections under the federal bankruptcy laws."
The new filing and potential bankruptcy comes after nearly a year of failed attempts by Chairman and CEO Robert Sillerman to try and save his company. He tried to take the company in the spring, but market conditions worsened, so he withdrew his offer. He tried again the fall, but failed to secure enough financing that big and also failed. There have been rumors of a possible fire sale of the assets under the SFX umbrella like Beatport, ID&T, Totem OneLove Group and Made Event, but it appears as though that SFX, which IPOed at 13 dollars a share in October 2013 is heading into potential bankruptcy.
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