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Clock Is Ticking On Citadel

S

SirRoxalot

Citadel finally released their 4th Quarter Corporate Report. Check out this little tidbit:

As of December 31, 2008, the Company is in compliance with its debt covenants under its senior credit facility. However, the
expected continuing decline in radio revenues in the first half of 2009 and the resulting projected decline in operating profits creates
uncertainty regarding the Company’s ability to continue to comply with its debt covenants under its senior credit facility through
2009. As a result, the Company is currently working with its lenders to obtain a waiver of or amendment to its senior credit facility;
however, there can be no assurance that the Company will be able to do so. In the event that the Company does not obtain a waiver or
amendment, then the Company will likely be in default of its senior credit facility.
The Company will file with the Securities and Exchange Commission a Notification of Late Filing on Form 12b-25 with respect to its
Annual Report on Form 10-K for the year ended December 31, 2008, and anticipates filing its Form 10-K on or before March 31,
2009.

Click here for exclusive audio of Ted Forstmann questioning Farid about the state of the company.
 
However, it's very likely that the company WILL get what it's seeking from its lenders. Because its lenders don't want to be stuck with assets it won't be able to sell. This is typical language used in corporate reports to inform stockholders of all possibilities. The issue will be how much equity it will give up in order to get those waivers. The othe issue is how much effect the government's baleout of the banks will play in loosening credit. Because, as I've said before, Citadel's debt is a mere fraction of the debt the lenders have. And the lenders have not passed on the savings and federal aid to their customers. They've instead pocketed all the money to pay off their own internal debts. The economy is one huge stopped-up toilet. So the delay that is going on at Citadel (and lots of other companies) has to do with seeing if and when the economy starts to move again.
 
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