Byron Allen’s Allen Media Group is planning deeper cost cuts as it stares down debt maturities, and has retained advisers, according to people familiar with the matter.
Bloomberg reports the company, which owns The Weather Channel and other television stations, has engaged Moelis & Co. and Kirkland & Ellis as its own legal counsel, some of the people said, asking not to be identified because the discussions are private. In July, creditors grouped together to tap their own legal advisers.
Allen Media’s debt has been trading at distressed levels over the last few months. The company’s $840 million term loan, which is maturing in 2027, was trading at around 65 cents on the dollar as of Tuesday, down from 88 cents in May, according to data compiled by Bloomberg
In its report, S&P said Allen Media faced “elevated refinancing risk due to its substantial debt burden.”
“Allen Media has a very limited ability to afford the current market interest rates on its term loan,” S&P said, adding it viewed the firm’s capital structure as “unsustainable.”
The company is expecting a boost over the next few months, thanks to political advertising ahead of US elections in November, said people familiar with Allen Media’s earnings.
On a call with investors last week discussing second quarter earnings, Allen Media’s management outlined year-over-year gains and said it expected earnings before interest, taxes, depreciation and amortization to be more than $300 million this year, the people said.
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