Westinghouse Credit Corp. has taken control of Radio & Records owner Westwood One Stations Group Inc. as payment for a $ 20 million loan.
Westinghouse Credit, the finance unit of Pittsburgh-based Westinghouse Electric Corp., told R&R executives that it plans to help the magazine land financing, then quickly sell it off, said Erica Farber, R&R’s executive VP.
A Westinghouse executive declined comment.
“Westinghouse has announced their support for our current management,” Farber said. “It’s certainly not going to affect our day-to-day operations.”
Financially troubled Westwood One Inc., the nation’s largest distributor of radio programming, put the unit that owns the influential radio trade magazine on the sales block in April as part of its plans to focus on its core network radio business. But with the sluggish economy and delays in starting up an R&R on-line information services business, the magazine had no buyers.
“We had a lot of investors who took a wait-and-see attitude,” said Geanne Smith, Westwood One’s investor relations coordinator.
Smith said Westwood One did not default on loans to Westinghouse. Rather, the terms of those loans allowed the company to seize assets, including the R&R unit.
Westinghouse chose to take control of the magazine, and pick up the responsibility of its $ 20 million debt load, instead of receiving payment on loans that were coming due in December. The principal and interest due on those loans was roughly $ 20 million.
Separately, Westwood One said its deal with Infinity Broadcasting Corp. moved from the letter-of-intent stage to a definitive agreement. Last month, Westwood agreed to turn over managing control to Infinity in a complicated deal in which Westwood will acquire Infinity’s Unistar Radio Networks.