It has been a rough year for SFX Entertainment. Chairman and CEO Robert Sillerman has tried and failed twice to take the company private and with the stock in the toilet, he is now seeking outside help to try and restructure the company's mounting debts and sell off some of the valuable assets under the SFX umbrella.
According to Reuters, the company which owns firms like ID&T, Made Event, Beatport and React Presents, has asked investment bank Moelis & Co to help reduce and renegotiate some of the company's debts in a way to help make its balance sheet look more tantalizing to potential buyers. Attorneys from New York law firm Steptoe & Johnson are advising SFX on the matter.
"It is correct that the company hired Moelis to examine broadly its position. That principally includes sales of non-strategic assets as well as examining the capital structure of the company," a spokesman for SFX told Reuters.
SFX's stock rose in early trading Monday (Nov. 30), but eventually fell back down to $.28 at the close of the markets. This is in sharp contrast from the company's IPO share price of $13.
The move to try and restructure its debts is not surprising given the dire situation that SFX is in and how few options it has. Robert Sillerman recently backed out of a move to try and take the company private, citing market conditions, though he did not secure the financing for the most recent attempt.
At the end of September, SFX had accumulated $310 million in debt, with just $59 million in cash to offset this. Worryingly, the company heads into the winter without the influx of summer festival dollars imminently ready to help bolster its coffers. Sillerman was able to land $90 million in financing in September as a lifeline, but more must be done to save the company from going bankrupt.
