Plagued real financial difficulties since the multiplication of its acquisitions at any cost, and serious management problems encountered during TomorrowWorld, Concert promoter SFX Entertainment said thursday that it may file for bankruptcy to deal with its continuing debt troubles.
The company, which puts on electronic-music concerts like Tomorrowland in Belgium, TomorrowWorld in Atlanta, Awakenings in Netherlands or Electric Zoo in New York, said in financial documents that it received a waiver of defaults on $300 million in debt through Jan. 28. In connection with that waiver, the company hired turnaround firm FTI Consulting Inc. to help it examine restructuring options that may be executed in bankruptcy, according to the documents.
” In order to facilitate its reorganization, the company may consider utilizing the available protections under the federal bankruptcy laws.” – SFX Entertainement
2 years after being floated to the tune of $ 260 million, SFX Entertainment is not far from declaring bankruptcy. According to Forbes, she has indeed appeal to FTI Consulting Services, a firm specializing in restructuring companies in financial difficulty. More than alarming situation that is felt directly on the health of SFX subsidiaries – including Beatport – the legal downloading platform leader in the world. Thus since August Beatport was unable to pay the royalties she had to labels and other artists. In total, at least no fewer than 14 subsidiaries and about twenty festivals that are in danger.
The latest development comes after a failed going-private transaction last year, led by Chairman Robert F.X. Sillerman, who made a $4.75-a-share offer for the company in March. That offer rose to $5.25 a share, but the deal was challenged in the Delaware Court of Chancery and scrapped in August.
Last year, SFX noted in regulatory filings that it may not have sufficient cash to fund its debt obligations during 2016. The company has $312.6 million in debt, mainly senior bonds due in 2019. As of Sept. 30, the date of SFX’s most recent earnings report, the company had $59.8 million in cash on hand.
SFX Entertainment traces its roots back to the 1970s when Mr. Sillerman founded SFX Broadcasting, which came to own 71 radio stations. When Mr. Sillerman sold the broadcasting company in 1998, he retained the event-promotion piece of the business and called it SFX Entertainment. A few years later, he sold that business to Clear Channel Communications Inc. for $4.4 billion in stock and debt assumption. He restarted the live-event business in 2011 with a focus on electronic- music festivals, and that company went public in 2013.