Granite Secures Credit, May Still File For Bankruptcy

Jul 5, 2006  •  Post A Comment

Granite Broadcasting Corp. has arranged $70 million in credit on two secured loans that mature Dec. 1, 2006, the company announced Wednesday.

While the new financing does not remove the possibility the company may have to file for bankruptcy protection, Granite said the new infusion of financing would, under the right conditions, allow it to proceed with the previously announced acquisition of WBNG-TV, the CBS affiliate in the Binghamton-Elmira, N.Y., market.

The announcement said one loan was to be used Wednesday to pay some $19.7 million in interest on $405 million in secured notes that was due last Friday.

Granite still had not completed the sales of WB-affiliated KBWB-TV in San Francisco and WDWB-TV, the announcement said without indicating why. A private investor group organized by former Meredith and Cox executive Kevin O’Brien wants to buy the stations for $150 million.

Harbinger Capital Master Fund had sought to block the two-station sale, but a Delaware judge late last week dismissed Harbinger’s suit.

Granite’s new credit deal requires financial restructuring, Granite said, so the station group will have to evaluate options with its financial advisors, Houlihan Lokey Howard & Zukin. Granite said one of the potential alternatives is a restructuring under Chapter 11 of the Bankruptcy Code.

A spokesman for Silver Point Capital declined to comment on speculation that Silver Point is the source of possible new credit for Granite.