Citadel Broadcasting plans to file for bankruptcy: report

LOS ANGELES (Reuters) - Citadel Broadcasting Corp CTDB.OB is planning to file a "prearranged" Chapter 11 bankruptcy plan by the end of the year, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

The bankruptcy plan would cut Citadel's debt load to $760 million, but would wipe out the radio broadcaster's current shareholders, the Journal reported. A Citadel spokeswoman could not be reached for comment.

The plan is being considered by Citadel's lenders, who would swap more than $2 billion in debt for about 99.5 percent equity in the reorganized company, the Journal said.

The reorganized company would be held by about 90 Citadel lenders, the Journal said. JP Morgan Chase & Co and General Electric Co's (GE.N) GE Capital, which hold about 40 percent of the debt, have agreed to the plan, the Journal said.

Citadel Chief Executive Farid Suleman would likely remain in his post, the sources told the Journal.

Citadel's network consists of 165 FM stations and 58 AM stations, and the company owns and operates the ABC Radio Networks, which it took on debt to buy from the Walt Disney Co (DIS.N) in 2006.

In November, the company reported having $1.4 billion in total assets and $2.48 billion in total liabilities in the quarter ended September 30, 2009, according to a 10Q filing with the U.S. Securities & Exchange Commission.

In the last quarter, it reported a 14 percent drop in revenue, to $183 million, and a quarterly loss of 8 cents per share versus a profit of 10 cents per share a year earlier, the filing showed.

Citadel shares, which trade on over the counter markets, closed down 16.2 percent at 4 cents on Thursday.

(Reporting by Gina Keating; Editing by Richard Chang)