February 4, 2010 / 12:36 PM / 10 years ago

UPDATE 1-Citadel Broadcasting files reorganization plan

* Plan to wipe out $1.4 bln debt

* Sees total debt of $762.5 mln once plan is confirmed

Feb 4 (Reuters) - U.S. radio broadcaster Citadel Broadcasting Corp CTDB.OB filed a reorganization plan and disclosure statement in a New York bankruptcy court that will wipe out $1.4 billion of the company’s debt.

In a court filing late on Wednesday, the company said it will have a total debt of $762.5 million once the plan is confirmed by the court.

Citadel, the third-largest U.S. radio broadcaster, filed for the bankruptcy protection in December under a prenegotiated deal with more than 60 percent of its senior lenders.

The company expects to have about $72.2 million in cash on hand by April 30, which will fund payments pursuant to the plan.

Under the plan, senior lenders will receive a share of the new term loan and 90 percent of new common stock in reorganized Citadel. Existing shares will be wiped out.

Citadel, whose network consists of 165 FM stations and 58 AM stations, took on debt to buy ABC Radio Networks from Walt Disney Co (DIS.N) in 2006.

The company has struggled with depressed advertising revenue with the rest of the industry.

The case is In re: Citadel Broadcasting Corp, U.S. Bankruptcy Court, Southern District of New York, No. 09-17442. (Reporting by Santosh Nadgir in Bangalore; Editing by Ratul Ray Chaudhuri)

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