The station group lends the digital platform company $14.5 million and extends it a line of credit for $1.5 more. Frankly CEO Steve Chung says the new loan will be used to pay off notes it incurred when it bought Worldnow last year. The noteholders include Raycom and Worldnow founder Gary Gannaway.
Raycom Increases Investment In Frankly
Frankly, a leading provider of digital media platforms to broadcasters and others, has got a big new loan and an implicit endorsement from Raycom Media, Frankly CEO Steve Chung says.
The deal restructures debt Frankly took on when it acquired Worldnow for $45 million a year ago, and will significantly increase Raycom’s investment in the company, Chung says.
“This investment should clear away any doubt about Frankly’s financial situation for prospective customers, as we have always represented to the market,” Chung says.
Under the new deal, Raycom is lending $14.5 million to Frankly and extending it a line of credit for another $1.5 million. The five-year $14.5 million loan carries a 10%-a-year interest rate.
Of the $14.5 million, $11 million will go to Woldnow founder and principal Gary Gannaway, and $3 million is being used to pay off $3 million of the $4 million in promissory notes held by Raycom from the purchase.
The remaining $1 million owed to Raycom from the acquisition will be converted to equity, which will increase its stake from 20% to around 27%, Chung says.
The $500,000 left from the new Raycom loan along with the Raycom line of credit will be used to fund operations, Chung says.
Chung says Frankly offers broadcasting a unique product.
“We are getting noticed by the biggest broadcasting customers as the only truly integrated digital platform that combines web, mobile apps, OTT, social and monetization all in one platform, wrapped around a foundation of data,” he says.
“This saves our customers time in the newsroom enabling them to focus on compelling story creation, not messing around trying to be an octopus maneuvering 18 different digital platforms just to get a breaking news story out to their audience.”