Nine months after filing for bankruptcy, dance music group SFX Entertainment has been given the go-ahead to emerge from administration
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Robert FX Sillerman's EDM conglomerate, currently worth just over one cent a share, will draw up a new agreement with creditors after ditching the one adopted in February
By IQ on 20 Jun 2016
SFX Entertainment has axed the restructuring support agreement (RSA) it signed with shareholders ahead of filing for bankruptcy in February, announcing that it will instead work with its “‘constituencies’ to formulate a revised plan” to rescue the ailing dance music group.
The original agreement, the terms of which have seen SFX cancel the 2016 TomorrowWorld and Stereosonic festivals, cut staff numbers and auction off its Flavorus and Fame House subsidiaries (Beatport was up for sale but the auction was terminated prematurely), secured the company US$115 million in new financing and wiped $300m in debt off its books.
SFX says a new rescue plan will provide it with “the flexibility for more comprehensive negotiations with all of its constituents”
SFX, which says it will continue to work “cooperatively” with stakeholders and the ominous-sounding “Official Committee of Unsecured Creditors”, says ditching the RSA will provide it with “the flexibility for more comprehensive negotiations with all of its constituents”.
Unless SFX has a buyer waiting in the wings, it is difficult to see how long it can stay afloat in lieu of any new financing – although the company says “there is no set timeline” for formulating a new rescue plan.
Following the termination of the RSA on Friday, SFX, led by under-fire chairman and ex-CEO Robert FX Sillerman, fell to a record low of $0.0125 per share.
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