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SFX confirms new financing as consultants consider its future
By Chris Cooke | Published on Monday 18 January 2016
Whether or not dance music peddler SFX would be worth acquiring as a going concern is highly debatable, but securing the rights to the EDM firm’s story – maybe to turn it into some kind of balearic beat, electro swing, 2-step, deep house opera – that’d be worth a punt. What with all the ups and downs (OK, mainly downs) that the company has been through in the last year, not least founder Robert FX Sillerman’s two failed bids to take the firm back into private ownership.
The struggling dance music festival promoter and Beatport operator continues to search for a way forward after a very tricky 2015 which saw the company’s share price tank, reaching a mere eight cents a piece at one point last week, compared to ten dollars plus in 2013.
As previously reported, having asked bankers Moelis & Co to investigate restructuring its approximately $300 million in debts late last year, earlier this month SFX confirmed it had appointed FTI Consulting to evaluate and assess “various restructuring and strategic alternatives, including working with management to analyse and optimise operations and financial performance”.
That statement also admitted that FTI’s recommendations might include applying for bankruptcy protection, which contributed to a further drop in the company’s share price. Though it was the news that the firm had defaulted on a $10.8 million loan, by missing a 4 Jan interest payment, that resulted in the record low of eight cents last week.
There was a glimmer of good news on Friday though, when the company confirmed it had raised $20 million in extra finance “for itself and certain of its operating subsidiaries, obtaining capital for its working and general corporate purposes”.
No more information about that financing was provided, though an SEC filing should reveal more once made public. The monies will presumably enable operations to continue while the FTI bods get busy working out the best way forward for the company, which still has some strong assets within its portfolio of EDM brands, but may struggle to find a buyer for the business outright. Though there’s always that house opera.
