Granite Warns It Can’t Cover Looming Interest Payment

Nov 14, 2006  •  Post A Comment

The red ink, precarious debt obligations and consideration of Chapter 11 reorganization continued Tuesday for Granite Broadcasting, which reported it doesn’t have the cash to cover a $19.4 million interest payment due Dec. 1 or to pay off its $70 million in outstanding loans.

Granite said it has suffered annual operating losses for three consecutive years and ended the quarter with an accumulated deficit of $514 million and $18.2 million in unrestricted cash. It reported a net loss of $36.1 million for the quarter, an 83 percent increase in the red ink from the $19.7 million net loss for the comparable quarter in 2005.

“In order to improve the company’s existing liquidity position and to further the company’s business strategy, the company is reviewing all potential reorganization alternatives with respect to its debt obligations and preferred stock, including a reorganization under Chapter 11 of the Bankruptcy Code,” the quarterly report said.