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December 29, 2009
Clear Channel Outdoor Closes Bond Sale
The outdoor advertising subsidiary of Clear Channel Communications Inc. said yesterday that it closed $2.5 billion in bond funding, the Deal Pipeline reported yesterday. Clear Channel Outdoor Holdings Inc. is selling $500 million in series A notes and $2 billion in series B notes, both due in 2017. The advertising company will use proceeds to repay debt owed to Clear Channel Communications, which owns 89 percent of Clear Channel Outdoor Holdings. The San Antonio parent, controlled by Bain Capital LLC and Thomas H. Lee Partners LP, said it will use the money to reduce its secured debts. Read more (subscription required).
name='2'>Pilgrim's Pride Emerges from Bankruptcy Protection
Pilgrim's Pride Corp. emerged from bankruptcy protection Monday with a $1.75 billion credit agreement and a new stock trading ticker after a 13-month restructuring, the Dallas Morning News reported today. Brazilian beef giant JBS SA is now majority owner of the Pittsburg, Texas-based poultry processor. JBS USA Holdings Inc. got a 64 percent stake in the company in exchange for $800 million cash, which will be used to pay back creditors. The other 36 percent of Pilgrim's common stock went to shareholders. Pilgrim's employs 41,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico.
name='3'>GM Plans Pontiac Fire Sale
General Motors Co. is offering its dealers hefty incentives to move thousands of leftover vehicles from its discontinued Saturn and Pontiac brands, the Wall Street Journal reported today. The unusual tactic could inflate the car maker's December sales and cut the cost to car buyers by as much as 46 percent off the sticker price. In what is equivalent to a year-end fire sale, GM sent letters to dealers Dec. 23 saying it would pay them $7,000 for every new Saturn or Pontiac on their lot that is moved to rental-vehicle or service-vehicle fleets operated by the dealers. Dealers can then sell the vehicles at a more attractive price, though they must be described to customers as used because the dealers technically will be the vehicles' first owner. The offer expires Jan. 4, the last day of the December car-sales month. GM's move could speed the company's restructuring. Pontiac and Saturn, along with Hummer and Saab, were deleted from GM's lineup under its government-backed bankruptcy reorganization this summer. The expense of the new program will add to GM's considerable cost of closing Saturn and Pontiac, a figure GM hasn't disclosed. Last December, GM sold about 250,000 vehicles. In recent months, however, it has been selling between 150,000 and 175,000 vehicles, meaning the Saturn and Pontiac clearance could provide a considerable boost to this month's results. Read more.
Broadcasters' Woes Could Spell Trouble for Free TV
For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That business model might not work much longer, according to the Associated Press yesterday. The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks' programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming. The changes could mean higher cable or satellite TV bills, as the networks and local stations squeeze more fees from pay-TV providers such as Comcast and DirecTV for the right to show broadcast TV channels in their lineups. The networks could operate free broadcast signals as cable channels - a move that could spell the end of free TV as Americans have known it since the 1940s. Read more. Read more.
name='5'>Visteon Creditors' Committee Certain Reorganization Plan Won't Be Confirmed
The creditors' committee for auto-parts maker Visteon Corp. says it's 'confident' the company's reorganization plan filed earlier this month won't be confirmed, Bloomberg News reported today. In a motion last week, the committee said it is 'displeased' with how the plan gives nothing to unsecured creditors. To test assumptions underpinning Visteon's plan, the committee will ask the bankruptcy court at a Jan. 21 hearing for authority to examine the company's financial records plus documents pertaining to the former parent, Ford Motor Co., which would be given releases under the plan. The committee said in the motion last week that Visteon's capacity to shoulder $320 million in debt after reorganization is 'dramatically lower' than the company told the creditors' panel on Dec. 2. The committee also says that terminating Visteon's pension plan will result in de minimis savings. Visteon's proposed plan would give nothing to unsecured creditors with $1.3 billion in claims while secured lenders take 96.2 percent of the new stock. Visteon filed for reorganization in May, listing assets of $4.6 billion against debt totaling $5.3 billion. Sales last year were $9.5 billion, including $3.1 billion to Ford, still the largest customer. The case is In re Visteon Corp., 09-11786, U.S. Bankruptcy Court, District of Delaware (Wilmington).
name='6'>GM May Not Decide on Saab This Week
General Motors Co. is prepared to wait beyond the end of this week before deciding on the future of the Saab brand as it reviews remaining bids, according to Paul Aakerlund, a board member at the Swedish carmaker, Bloomberg News reported today. GM told Saab last week that it would wind down the unit and simultaneously continue talks with bidders about a sale, said Aakerlund, who also heads the IF Metall union at Saab. Negotiations to sell Saab to Spyker Cars NV collapsed Dec. 18, and Spyker Chief Executive Officer Victor Muller blamed the failed deal partly on a 'strict deadline' for an agreement by Dec. 31. The Dutch carmaker submitted a new offer on Dec. 20. Some 3,500 Saab jobs are at risk, along with thousands of positions among suppliers to the automotive industry in Sweden. Two attempts to sell the 72-year-old brand failed in the past five weeks, and since then GM has said it received inquiries from 'several parties.' The brand is among four being sold or shut as GM focuses on Chevrolet, Buick, GMC and Cadillac after its July 10 bankruptcy exit. Read more.
name='7'>Six Flags Creditors Demand Disclosure by Noteholders
Although creditors of theme-park operator Six Flags Inc. will be voting on a proposed reorganization plan, the creditors' committee is asking the bankruptcy court to require members of an unofficial committee of operating company noteholders to comply with bankruptcy rules by giving details about their holdings and trading in claims against the company, Bloomberg News reported today. The official committee contends in its motion filed Dec. 24 that the noteholders, while attempting to impose a plan on the company to serve their interests, were at the same time trying to shield themselves from the treatment they were attempting to impose on others. The committee argues that the disclosure previously made by the unofficial committee members isn't as complete as the bankruptcy rules require. The official committee wants the bankruptcy judge to hold a Jan. 8 hearing on the motion to compel complete disclosure by the noteholders. The proposed schedule calls for the contested confirmation hearing to begin March 8. The Six Flags chapter 11 petition in June listed assets of $2.9 billion against debt totaling $3.4 billion, including an $850 million secured term loan and a $243 million revolving credit. New York-based Six Flags has 20 theme parks, with 18 in the U.S. The parks have 800 rides, including 120 roller coasters. The case is Premier International Holdings Inc., 09-12019, U.S. Bankruptcy Court, District of Delaware (Wilmington). Read more.
name='8'>Trump Plan Trims Estimated Recovery by Noteholders
Casino owner Trump Entertainment Resorts Inc. filed a sixth amendment to its reorganization plan, Bloomberg News reported today. The explanatory disclosure statement, also revised, now projects that noteholders and unsecured creditors will recover just under one percent, rather than 1.4 percent shown in the prior version. Creditors are voting on competing plans. The other proposal is from Carl Icahn, who this month purchased the secured bank debt of Beal Bank. The confirmation hearing for approval of one of the plans had been tentatively scheduled for Jan. 20, although the date was up in the air after a hearing earlier this month. Trump Entertainment, the owner of three casinos in Atlantic City, filed for chapter 11 reorganization again in February. The new petition listed consolidated assets of $2.06 billion against debt totaling $1.74 billion. Liabilities include $1.25 billion in second-lien notes, $489 million in first-lien bank debt with Beal as agent, $33.2 million in trade debt, and $6 million in liabilities on leases, according to a court filing. The companies own the Trump Taj Mahal Casino Resort, the Trump Plaza Hotel and Casino, and the Trump Marina Hotel Casino. The new filings came less than four years after emerging from a prior bankruptcy reorganization. The case is In re TCI 2 Holdings LLC, 09-13654, U.S. Bankruptcy Court, District of New Jersey (Camden). Read more.
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