The organisers of Stereosonic have issued a statement in the wake of bankruptcy proceedings for SFX, the global EDM concert giant that acts at Stereosonic’s parent company, which has filed for Chapter 11 proceedings after months of financial hardship.
In the statement, Stereosonic organisers Totem Onelove distanced themselves from SFX Entertainment Inc, insisting its bankruptcy proceedings are confined to the US and would not affect Totem Onelove nor their flagship festival.
“As part of a restructuring agreement with an ad hoc group of SFX Entertainment, Inc. bondholders, SFX filed for Chapter 11 under the United States Bankruptcy Code on February 1, 2016, with the goal of restructuring its debt, improving its balance sheet and maximizing value for all of its stakeholders,” they write.
“This proceeding is taking place in the United States only; none of the international operating subsidiaries are included or impacted. Totem Onelove is not part of the SFX Chapter 11. Totem Onelove will continue to operate as normal.”
“We are cash-flow positive, can and will pay business expenses and remain committed to planning for, preparing, and producing the festival and events we are known for. It is important to note that the SFX Chapter 11 proceeding taking place in the United States is not liquidation.”
“SFX is not going out of business and, in fact, has received a sizeable capital infusion to pay for ongoing operating expenses. We at Totem Onelove see this as a positive turn of events for the SFX North American businesses that can now focus on the future.”
As The Music Network reports, SFX filed for Chapter 11 bankruptcy on Monday in the hopes of eliminating more than US$300 million from its outstanding debt and taking the company private. The move followed several hard months for the company.
A new CEO is set to succeed current CEO and Chairman Robert F.X. Sillerman and is expected to be announced in the coming days. The New York-based company is hoping to conclude bankruptcy proceedings and complete its restructure in six months.
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In addition to Stereosonic, the company also owns other popular festival brands like Tomorrowland, Electric Zoo, Stereosonic, Voodoo Experience, and EDM companies Beatport, Famehouse, React Presents, Made Events, and i-Motion.
Back in January, Nasdaq reported that SFX owed “$312.6 million in debt, mainly senior bonds due in 2019”, whilst having only $59.8 million in cash on hand, according to a 30th September earnings report.
Despite reporting a 48 percent rise in second quarter revenue back in August (a total of $121 million), this did nothing to make the company profitable nor reduce its debt. SFX still ran up operating losses of $48 million.
