Spanish Broadcasting System has followed through on the path it announced in April, filing a prepackaged Chapter 11 bankruptcy petition Monday in US Bankruptcy Court for the District of Delaware as it moves to restructure its balance sheet and emerge with a simplified capital structure.
Under the plan, noteholders will receive all of the company’s common stock and up to $70 million in new secured notes carrying the same 9.750% interest rate as the existing notes, now extended to 2030. A management incentive plan reserving up to 10% of fully diluted new common stock, with terms to be set by the incoming board, represents the only dilution noteholders will face.
Creditors are expected to be unimpaired, with trade creditors paid in full in the ordinary course of business. Raúl Alarcón, who founded SBS with his father in 1983, is expected to remain CEO of the reorganized company.
The restructuring also carries a $30 million debtor-in-possession facility administered by Brigade Agency Services, with lenders holding the option to convert that debt into new superpriority secured notes at emergence rather than accept cash repayment — a variable that could affect the final capital structure. FCC approval is a hard condition for the plan’s effective date, and SBS must also obtain a declaratory ruling permitting the reorganized company to exceed indirect foreign ownership limits. Kroll Restructuring Administration is serving as claims and noticing agent; the case is before Judge Brendan Shannon in Delaware.
SBS said the restructuring is designed to position the company for long-term growth, with greater financial flexibility expected to support expanded audience reach, advertiser services, and content delivery across on-air and digital platforms.
Alarcón added, “This restructuring represents an important step forward in strengthening our balance sheet and positioning the company for the future. We have strong alignment with our key stakeholders and a clear path to emerge with a significantly strengthened capital structure.”
