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Has Nassau defaulted?

N

NHRadio

I'm hearing rumors from more than one source that Lou and the crew have lost control of the company as it's been taken over by one or more of its creditors. The rumors say some or all of the stations will be offered for sale. Can anyone confirm or deny?
 
I heard that they were able to refinance with a new equity structure that no longer had them grandfathered regarding ownership caps in some markets. As I understand it, there are no other changes other than satisfying current FCC market ownership limits.
 
I wonder how much equity is now in the hands of the new lender. Who would've thought the UAW would own more than half of Chrysler? Not that that equity is worth much lately.
 
If this is to be believed, looks like pencil-pushers will be calling all the shots... and as we've seen with Bain Capital/CC, will be making personnel decisions based on bottom-line and bottom-line alone, without regard to who makes what cluster tick.

There are some good people working for the Nassau stations in select markets, let's hope they do right by them.

Glug glug!

Cheers,
OldPort Wino
 
I have no relationship with Nassau, nor do I have 1st hand knowledge, but my sources also say based upon an internal memo that the creditors are acquiring an equity interest, that a couple of signals will be put in to trust to be sold in order to meet ownership caps, and in some markets where the creditors already have attributable interests, some stations will be placed into different companies. FCC filings to come will tell us for sure.
 
From a source inside Nassau....a copy of the memo....enjoy.

***From:* Lou Mercatanti
***Sent:* Monday, April 27, 2009 4:44 PM
***To:* Lou Mercatanti
***Subject:* Memo from Lou Mercatanti

Date: April 27, 2009

To: All Nassau Employees

Re: Nassau's Capital Structure

From: Lou Mercatanti

As some of you may know, Nassau has been in recent negotiations regarding a
restructuring of its current credit facility with our Lender Goldman Sachs.
Our credit facility became due on September 30, 2008 and I, along with our
corporate team, have been working with our lenders to come up with a viable
plan to refinance or restructure the company's debt in the face of the
country's worst credit crisis and advertising markets in decades. I am
pleased to announce today that we have signed a formal restructuring
agreement whereby our lenders have agreed to a debt for equity exchange
whereby our lenders will exchange approximately two thirds of the company's
outstanding debt for an 85% equity stake in the company. This transaction
puts the Company on solid financial footing during these recessionary times
and will provide us with the financial strength to take advantage of an
improving economy in all of our markets. Goldman Sachs has been a
longstanding credit partner of the Company, is a highly respected and
creative financial institution and will serve the Company well as a new
equity partner in the years to come.

Now for a few further details. The exchange will require a filing with the
FCC which will later this week to allow Goldman and our lender group to
receive the equity and join our Board of Directors. To facilitate this
transaction and as a result of certain FCC rules surrounding "grandfathered"
ownership concentration issues in our Concord-Lakes and Portland markets,
the Company will be required to divest of three radio stations, WWHQ and
WNNH in Concord-Lakes and WHXR in Portland (WHXR is a simulcast station
only, WHXQ The Bone remains in the Company). These three stations will be
moved into a divestiture trust upon approval by the FCC of the entire
transaction. In addition, as a result of some attributable interests of
some of our Lenders in other radio companies and other considerations, our
stations in Cape Cod and Boston MA will be moved into separate companies.
However, Nassau will continue to operate these stations.

Most importantly, an important message I would like to convey to all is that
other than this positive development for our capital structure and the
future of our company referenced above, there are no other changes occurring
in connection with this transaction that will impact the operations of the
Company. I remain as your CEO and your existing management team is and will
be here to assist and guide all of you and the Company through these
interesting and challenging times and on to better times ahead for all.
Nassau, as has been the case numerous times before, is ahead of the curve
with our corporate restructuring. This year there will be substantial
changes to the capital structures and ownership profiles of many companies
in our industry due to the economic and credit environment, and I am pleased
that we now have a capital structure that allows us to get back to the
important work of providing unparalleled service to our listeners and
advertisers.

I would like to personally thank all of you for your hard work and
dedication and please feel free to contact me personally or any one of our
senior managers with any questions regarding this transaction.

Lou



--
"Always do sober what you said you'd do drunk; that will teach you to keep
your mouth shut." -Hemingway
 
Good for Nassau for being able to keep the boat afloat.. :D. Maybe a little too much information here... ???
 
Those stations will become Nassau's version of the Last Bastion Radio Trust, (Citadel) or Aloha Trust (Clear Channel) which were created as a seperate company to sell off assets that were over the market limits.. Think Citadel's WCYI and WCLZ or Clear Channels WGIP-AM that had to go, since the stations were over the legal market limits of ownership..
 
There's a thread on here about WGIP.. The station landed in local, capable hands trying to make a go of it being hyperlocal to the Exeter area.. It has new calls.. WXEX ?? There's a website for it too..
 
This "leaked"internal memo, written by Lou Mercantani to himself,hasn't been seen within the walls of a certain Nassau cluster, by any of the employees I've talked to.
 
Jimc said:
This "leaked"internal memo, written by Lou Mercantani to himself,hasn't been seen within the walls of a certain Nassau cluster, by any of the employees I've talked to.
Click to expand...

Seems to be the consensus...
 
can you say "worried"? it's a shame because there were some good properties involved here and really talented people (staff),too.
 
Jimc said:
(snip)
hasn't been seen within the walls of a certain Nassau cluster, by any of the employees I've talked to.
(snip)
Click to expand...

Ouch! That can't be a good sign then, could it? Why hide details like this from 'certain' clusters... unless of course it won't matter too much to them in a few weeks, if ya know what I mean. Not very good news may be arriving soon... But I do hope it all works it's way out so more good people aren't out pounding vacant streets looking for non-existant employment... Sad. :(
 
If all this happens what's likely to happen to 106.7 WHXR?It has a poor signal and is really only good for what it is now,a simulcast.Saga & Citadel are maxed out with ownership.That leaves Atlantic Coast and I doubt they want it.There's always EMF.They seem to buy stations with very little cash down.Anyone know how much debt they're in?How about St. Josephs College in Standish.They gave up 91.5 a while back.They could have a fund raiser.Anyone have any thoughts?
 
FNX of Boston could buy it. This would give FNX a better signal in Portland since 92.1 has a fringe signal in Portland. I don't know if this would work but WEEI has a Portland signal too. I never understood why the bone is on 106.3 and 106.7 because they both have about the same signal.
 
I could see FNX buying 106.7 and adding it to 92.1, as for the rest, I think ACR is out, JJ doesn't seem too interested in increasing his portfolio (not going after 93.9/98.9 or buying back trhe vacant 900 in Brunswick) and EMF is always in play, however in Bangor they seem to have 2 full power K-Love stations with 2 translators silent.

What I'll be interested in seeing is what happens to WWHQ, maybe it gets paired up with it former simulcast on 102.3?
 
It would be nice if Blueberry grabbed WHXR. I think WABK has the best programming in Maine, sure would like to be able to hear it a little clearer.
 
If Blueberry got it I think a WTOS simulcast would be great to bring it back to the Portland area. I don't quite understand the whole simulcast deal with WCME in Boothbay other then it saves hiring anyone to run it but if they think that they are even remotely hitting listeners displaced by WJZP then they need to take a drive down 295.
 
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