SFX Looks To Restructure Debt

SFX retained financial adviser Moelis & Co. in March, and its duties have been expanded to include exploring debt restructuring options, according to the Wall Street Journal.

SFX said in a recent SEC filing that it may not have sufficient cash to meet its debt obligations next year.

“However, we believe our access to existing financing sources and established relationships with our investment banks will enable us to continue to meet our obligations and fund ongoing operations,” SFX said in the November filing, noting however that it’s not a certainty, according to the WSJ.

SFX has $312.6 million in debt – mostly from senior bonds due in 2019. But at the end of the third quarter, the company reported $59.8 million in cash on hand. In order to meet its obligations, SFX reported, it would have to make $29.4 million in payments during the final quarter of 2015 and the first half of 2016.

The Journal reports that as of Nov. 9, $2.2 million of that amount had been paid.

“To the extent we do not have available cash on hand on the payment date for each payment, we will be required to negotiate for extensions or other modifications of the payment terms,” the company said in its Q3 financial filing.

Moelis & Co. was initially hired to put together a deal, since abandoned, with CEO Robert Sillerman to take SFX private. That plan has fizzled twice; Sillerman failed to produce financing for a deal in August and subsequently announced another bite at the apple in October but withdrew a month later.

At press time, shares of SFXE were trading at 24 cent per share. The company has also been notified by NASDAQ that it is at risk of being delisted for trading at less than $1 per share.