Steel City Media files Chapter 11 bankruptcy, exploring alternatives

By Caroline Salls

Pittsburgh, March 21 – MGTF Radio Co., LLC and WPNT, Inc., which do business as Steel City Media, filed Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the Eastern District of Missouri.

The company said it will continue to operate its business while it seeks to reorganize under Chapter 11.

“The company remains very profitable and expects to be able to generate sufficient cash from operations to meet the expenses of running our business during the Chapter 11 proceedings,” vice president Michael Frischling said in a company news release.

“Despite having paid down our senior lender by more than $20 million, or more than 35%, since 2014, softness in our markets has resulted in non-compliance with certain technical covenants. We believe that Chapter 11 is the appropriate venue to seek to resolve these issues.

“We look forward to emerging from Chapter 11 as an independently owned strong player in our markets and with a reset capital structure in place for the long term.”

The company has hired Robert Eggmann and Thomas Riske and the law firm of Carmody MacDonald PC as counsel and Gordian Broadcast Technologies as financial adviser to assist it in exploring alternatives, including stand-alone recapitalization and potential third-party investment scenarios.

In addition, Steel City Media said it has initiated preliminary discussions with certain of its key constituencies, including lenders under its senior credit facility and subordinated notes, as well as potential financing partners.

The company said trade suppliers, unsecured trade creditors, employees and customers are not expected to be significantly adversely affected by the outcome of the process.

Steel City Media requested court approval to use the cash collateral of its pre-bankruptcy lenders.

“Without the ability to use cash collateral, the debtors may not have sufficient alternative available sources of working capital to remain in business,” according to a motion filed Wednesday.

The company said it is authorized to use the cash collateral on an interim bridge basis from the bankruptcy filing date through 12:59 a.m. ET on March 30.

According to court documents, Steel City Media has $50 million to $100 million in both assets and debt.

The company’s largest unsecured creditors are Fifth Third Bank of Chicago, with a $38.48 million claim, and Business Development Corp. of America, based in Charlotte, N.C., with a $24.5 million loan agreement claim.

Steel City is a Pittsburgh-based radio station owner. The Chapter 11 case number is 18-41671.

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