SFX Entertainment Inc., a well-known promoter of electronic dance music festivals, filed for Chapter 11 bankruptcy on Monday after a year of struggling to reconcile $300 million of debt.
The company decided to go private after reaching an agreement with a group of creditors who plan to convert their bonds into ownership of the company. The company’s bondholders also agreed to loan SFX up to $115 million in order to continue operations. That figure should be able to keep the company afloat during the busy festival season ahead.
The news doesn’t come as a complete shock. Just a few weeks ago SFX defaulted on a loan and missed a payment of a few million dollars, all while CEO and founder Robert Sillerman has been trying to take the company private since 2013. The company’s stock is said to have dipped below $1 per share at least once in the last year.
SFX’s holdings are enormous, and if it were to disappear completely, the effects could be catastrophic for the festival world. The company owns sizeable stakes in some of the largest events in the world, including Tomorrowland, Rock In Rio, and Electric Zoo to name a few.
Because of this new deal, Sillerman will reportedly no longer be running the company.