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FOR THE THIRD TIME in its three-and-a-half-year history, independent television station WXIN-59 is up for sale.
In a move to reduce bank debt and extend credit capacity, Outlet Communications Inc., a Providence, R.I.-based media group, has announced plans to sell the holdings of an affiliate company, Atlin Communications, owner of Indianapolis' WXIN and Atlanta independent WATL.
According to Outlet chairman and chief executive officer Bruce G. Sundlun, Outlet needed to extend its line of credit to finance its newest acquisition, an FM radio station in Washington, D.C., WASH-FM. Outlet paid $29.25 million for the radio station on Dec. 3.
The two Atlin stations already have eaten up a substantial amount of Outlet's $140 million credit limit. Although Atlin is a separate, privately owned company, its owners are Outlet's principal shareholders and Outlet holds the guarantee for Atlin's bank debt.
For the first nine months of 1987, for example, Atlin showed a net operating loss of $7.6 million, according to Sundlun. Although the company was projected to lose money, Sundlun says it lost more than anticipated and had defaulted on its original bank loan.
In exchange for a waiver on Atlin's default and a $15 million credit extension from lenders, Outlet agreed to sell the Atlin stations and use the proceeds to repay Atlin's bank debt. As it is, Atlin shareholders have agreed to loan $5 million to fund the debt if needed.
Although the sale seems to be a cut-and-dried situation of unloading unprofitable stations, there is some behind-the-scenes turmoil.
The two independent stations have been a cash drain on Outlet since the company purchased them. Outlet purchased WXIN in February 1985 from USA Communications Inc., a company made up of local investors, including Mel and...