SFX’s Bumpy Ride Continues With $20 Million in New Financing
The financing follows an announcement that SFX defaultd on a $10.8 million loan.
SFX Entertainment’s financial saga took a couple turns this week when the company followed up a loan default with the announcement of new financing.
The troubled EDM promoter revealedFriday it raised $20 million “for itself and certain of its operating subsidiaries, obtaining capital for its working and general corporate purposes.” Those were the only details released. More information will be given in an SEC filing that had not been released by midday Friday.
Friday’s announcement followed SFX’s announcement on Wednesday it had defaulted on a $10.8 million loan because it missed a $3 million interest payment that was due on January 4. The entire amount of the loan, plus interest that is now accruing at 10 percent per year, is due immediately.
Investors welcomed the news, however. Shares of SFX stock had risen 76.4 percent to $0.14 by mid-afternoon Friday. It was no doubt a small victory for some shareholders. SFX shares’ 52-week high is $5.25.
What seems like a financial fumble is part of a larger plan to rehabilitate its balance sheet. SFX announced last week it had hired consultancy firm FTI Consulting. FTI will help SFX determine if it needs to sell assets, restructure its debt or file for bankruptcy.